Municipal bond traders were finishing up their week's work, a substantially lighter-than-expected load after the week's calendar was reduced by $875 million when the Chicago Public Schools postponed its general obligation bond deal.
Chicago Board of Education officials placed the offering on the day-to-day negotiated calendar and said the decision was made to give investors and the underwriting syndicate more time.
Schools chief Forrest Claypool said Thursday the district plans to hit the market by early next week at the latest.
Secondary Market
Treasuries were higher on Friday. The yield on the two-year Treasury declined to 0.78% from 0.82% on Thursday, while the 10-year Treasury yield dropped to 1.94% from 1.98% and the 30-year Treasury bond yield decreased to 2.75% from 2.79%.
Municipal bonds finished steady on Thursday. The yield on the 10-year benchmark muni general obligation was unchanged from 1.75% on Wednesday, while the 30-year muni yield was steady from 2.77%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Thursday at 88.2% compared to 87.5% on Wednesday, while the 30-year muni to Treasury ratio stood at 99.3% versus 99.2%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,546 trades on Thursday on volume of $9.09 billion.
Primary Market
In offerings that did come to market this week, Fairfax County, Va., sold $344.84 million of Series 2016A public improvement and refunding bonds. Morgan Stanley won the bidding with a true interest cost of 2.45%. The deal was rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
The Massachusetts Clean Water Trust sold $207.81 million of Series 19 state revolving fund green bonds in the competitive sector. Bank of America Merrill Lynch won the bonds with a true interest cost of 2.66%. The issue was rated triple-A by Moody's, S&P and Fitch.
Siebert Brandford Shank & Co. priced Kansas City, Mo.'s $183.68 million of Series 2016A sanitary sewer system improvement and refunding revenue bonds. The bonds were rated Aa2 by Moody's and AA by S&P.
Citigroup priced Katy Independent School District, Texas' $267.99 million of unlimited tax school building and unlimited tax refunding bonds. The deal was backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
Ramirez & Co. priced Nassau County, N.Y.'s $273 million of Series 2016A GO general improvement bonds. The deal was rated A2 by Moody's, A-plus by S&P and A by Fitch.
Wells Fargo Securities priced the Airport Commission of the City and County of San Francisco's $234.79 million of second series revenue refunding bonds for the San Francisco International Airport. The deal was rated A1 by Moody's and A-plus by S&P and Fitch.
Goldman Sachs priced the Nebraska Public Power District's $139.7 million of general revenue bonds. The deal was rated A1 by Moody's and A-plus by both S&P and Fitch.
Morgan Stanley priced the successor agency to Pittsburg Redevelopment Agency, Calif.'s $158.83 million of subordinate tax allocation refunding bonds for the Los Medanos Community Development Project. The issue was insured by Assured Guaranty Municipal and rated AA by S&P. The issue has underlying ratings of triple-B-plus from S&P and triple-B-minus from Fitch.
Waco, Texas, competitively sold two issues totaling $109.25 million. Robert W. Baird won the $82.69 million of Series 2016 combination tax and revenue certificates of obligation with a TIC of 2.87%. Baird also won the $29.47 million of Series 2016 general obligation refunding bonds with a TIC of 2.92%. Both issues were rated Aa2 by Moody's and AA-plus by S&P.
Cincinnati, Ohio, competitively sold two issues totaling $99.38 million. Hutchinson Shockey Erley won the $95.77 million of Series 2016A unlimited tax various purposed GO improvement and refunding bonds with a TIC of 2.37%. Baird won the $3.61 million of Series 2016B taxable unlimited tax various purpose GO refunding bonds with a TIC of 2.69%. Both issues were rated Aa2 by Moody's and AA-minus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $2.92 billion to $8.61 billion on Friday. The total is comprised of $2.56 billion of competitive sales and $6.03 billion of negotiated deals.
Municipal Bond Funds See Inflows for 17th Straight Week
Municipal bond funds reported inflows for the 17th week in a row, according to Lipper data released on Thursday.
Weekly reporting funds said they had $594.785 million of inflows in the week ended Jan. 27, after inflows of $529.687 million in the previous week, Lipper said.
The four-week moving average remained positive at $778.033 million after being in the green at $954.206 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced inflows, gaining $485.450 million in the latest week, on top of inflows of $91.669 million in the previous week. Intermediate-term funds had inflows of $164.233 million after inflows of $502.939 million in the prior week.
National funds saw inflows of $531.623 million after inflows of $475.167 million in the prior week. High-yield muni funds reported inflows of $221.250 million in the latest reporting week, after inflows of $231.066 million the previous week.
Exchange traded funds saw inflows of $93.222 million, after inflows of $107.761 million in the previous week.
In the week ended Jan. 20, long-term, long-term municipal bond funds saw inflows, according to the Investment Company Institute. Muni funds saw $1.003 billion of inflows after $1.319 billion of inflows in the previous week, ICI reported.
