The municipal bond market is awaiting the institutional pricing of New York City's general obligation bonds and sale of the Michigan State Building Authority's revenue and revenue refunding bonds as the last of the week's large new issues come to market.
Secondary Market
Treasury prices were mixed on Thursday, with the yield on the two-year Treasury note rising to 0.74% from 0.70% on Wednesday, while the 10-year yield was flat from 2.27% and the 30-year yield increased to 3.00% from 2.98%.
Prices of top-quality municipal bonds finished weaker on Wednesday, traders said, with yields on some maturities strengthening by as much as three basis points.
The yield on the 10-year benchmark muni general obligation finished up three basis points to 2.23% from 2.20% on Tuesday, while the yield on the 30-year GO increased two basis points to 3.16% from 3.14%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Wednesday at 97.8% versus 99.2% on Tuesday, while the 30-year muni to Treasury ratio stood at 105.6% compared to 106.0%, according to MMD.
Primary Market
Siebert Brandford Shank is set to price New York City's $750 million of Fiscal 2016 Series A&B GOs for retail investors on Thursday after holding a two-day retail order period.
Siebert Brandford Shank priced the Big Apple bonds on Tuesday and Wednesday for mom and pop investors.
The $640.2 million of Series A bonds were priced for retail to yield from 1% with 5% and 3% coupons in a split 2018 maturity to 2.70% with a 5% coupon in 2026; a 2017 maturity was offered as a sealed bid. No retails orders were taken in the 2027 through 2030 maturities.
The $109.8 million of Series B bonds were priced for retail to yield from 1% with a 4% coupon in 2018 to 3.54% with a 3.5% coupon in 2035; the 2016 and 2017 maturities were offered as sealed bids.
The issue was rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Also on Thursday, JPMorgan will price the Michigan State Building Authority's $990 million of Series 2015 I revenue and revenue refunding bonds.
The issue, tentatively structured as serials running from 2015 through 2050, was rated Aa3 by Moody's, A-plus by S&P and AA-minus by Fitch.
Since 1995, the Michigan SBA has issued roughly $8.94 billion of debt. The years of 2003 and 2005 saw the most issuance with $1.05 billion and $1.07 billion, respectively. The authority did not come to market at all in 2010, 2012 and 2014.
On Thursday's competitive slate, Columbus, Ohio, plans to sell nearly $319 million of bonds in three separate deals.
The offerings consist of $230.66 million of Series 2015A unlimited tax various purpose bonds, $74.69 million of Series 2015B limited tax various purpose bonds, and $13.64 million of Series 2015C taxable limited tax various purpose bonds.
The issues were rated triple-A by Moody's, S&P and Fitch.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $1.41 billion, bringing total net assets to $245.42 billion in the period ended July 27, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $346.9 million to $246.83 billion in the previous week.
The average, seven-day simple yield for the 384 weekly reporting tax-exempt funds remained at 0.01% for a 117th straight week.
The total net assets of the 968 weekly reporting taxable money funds fell $5.99 billion to $2.422 trillion in the period ended July 28, after experiencing an inflow of $29.44 billion to $2.428 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 28th consecutive week.
Overall, the combined total net assets of the 1,379 weekly reporting money funds decreased $7.40 billion to $2.668 trillion in the period ended July 28, which followed an inflow of $29.78 billion to $2.675 trillion the week before.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,824 trades on Wednesday on volume of $8.031 billion.
The most active bond, based on the number of trades, was the Lehigh County General Purpose Authority, Pa., Series 2015A hospital revenue 4 1/4s of 2045, which traded 157 times at an average price of 99.562, an average yield of 4.276%. The bonds were initially priced at 97.352 to yield 4.41%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $3.00 billion to $13.71 billion on Wednesday. The total is comprised of $1.01 billion competitive sales and $12.70 billion of negotiated deals.
