Prices of top-rated municipal bonds were mixed at mid-session, traders said, as yields on some maturities were unchanged to one basis point lower.
Meanwhile, municipal bond market participants are taking a breather on Friday as they prepare for next week's $9 billion new issue slate, topped off by Florida and Missouri issuers but spiced up with sales from Chicago and Atlantic City.
Secondary Market
The yield on the 10-year benchmark muni general obligation was flat from 2.25% on Thursday, while the yield on the 30-year GO was up as much as one basis point from 3.25%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mostly higher on Friday as the yield on the two-year Treasury note dropped to 0.54% from 0.55% from Thursday, while the 10-year yield declined to 2.17% from 2.24% and the 30-year yield decreased to 2.95% from 3.05%.
The 10-year muni to Treasury ratio was calculated on Thursday at 100.8% versus 98.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 106.5% compared to 105.2%, according to MMD.
Primary Market
Leading off next week's calendar is a $750 million issue from Florida's Citizens Property Insurance Corp. Bank of America Merrill Lynch is expected to price the Series 2015A-1 coastal account senior secured bonds on Monday. The issue is rated A1 by Moody's Investors Service, A-plus by Standard & Poor's Corp. and AA-minus by Fitch Ratings.
In the competitive arena, Springfield, Mo., is selling $515 million of Series 2015 public utility refunding revenue bonds on Wednesday. The bonds are rated AA-plus by S&P and AA by Moody's. The last time Springfield was in the competitive market was on Sept. 14, 2006, when it sold $615 million of Series 2006 public utility revenue bonds to UBS Securities with a true interest cost of 4.54%.
And hard on the heels of two rating agency downgrades, the city of Chicago is coming to market with two deals. Siebert Brandford Shank is set to price the city's $181.85 million of Series 2003B general obligation project and refunding bonds on Tuesday, while Ramirez & Co. is expected to price Chicago's $172.79 million of Series 2002B GO Neighborhoods Alive 21 program bonds, also expected Tuesday.
Atlantic City, N.J., will be in the market too next week, with a $41 million issue of taxable GOs backed up by a special state program. Bank of America Merrill Lynch will price the Series 2015A taxable GO refunding bonds on Tuesday. New Jersey's Municipal Qualified Bond Act is intended to facilitate distressed municipal issuers' access to the capital markets. The program instructs the state Treasurer's office to withhold qualifying state aid from Atlantic City and directs the funding instead to bondholders.
Elsewhere, Barclays Capital is slated to price the Port Authority of New York and New Jersey's $500 million of consolidated bonds, 191st Series on Tuesday. The issue is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
The state of Connecticut is back in the market, this time with $481.62 million of Series 2015C and Series 2015D bonds. Loop Capital Markets will price the issue, which will consist of $200 million SIFMA-indexed bonds and $281.62 million of general obligation bonds. The issue is rated Aa3 by Moody's and AA by S&P, Fitch and Kroll Bond Rating Agency.
Jefferies is expected to price Miami-Dade County, Fla.'s $481.79 million of Series 2015 water and sewer system revenue refunding bonds. The bonds are rated Aa3 by Moody's and A-plus by S&P and Fitch.
And the New York City Municipal Water Finance Authority's $435 million of water and sewer system second resolution revenue bonds, Fiscal 2015 Series HH, will be priced by Barclays Capital on Tuesday after a retail order period on Monday. The bonds are rated AA-plus by S&P and AA by Moody's.
Back in the competitive sector, the Virginia Public Building Authority will sell $368.39 million of public facilities revenue bonds on Tuesday. The issue is comprised of $230.31 million of Series 2015A bonds and $138.08 million of Series 2015B refunding bonds. The issue is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The last time the Virginia PBA sold bonds competitively was on Aug. 27, 2014, when Wells Fargo Securities won $29.74 million of Series 2014B taxable public facilities revenue bonds with a true interest cost of 3.23%.
Seattle, Wash., will offer $229.15 million of Series 2015 water system improvement and refunding revenue bonds on Wednesday. The issue is rated Aa1 by Moody's and AA-plus by S&P.
The last time the city sold bonds competitively was on May 15, 2012, when Citi won $238.77 million of Series 2012 water system refunding revenue bonds with a TIC of 2.62%.
Nassau County, N.Y., is selling $168.90 million of Series 2015 B general improvement bonds on Wednesday. The issue is rated A1 by Moody's, A-plus by S&P and A by Fitch.
The last time the county sold bonds competitively was on Jan. 21 when FTN Financial Capital Markets won $29.64 million of Series 2015A general improvement bonds with a TIC of 2.99%.
The Santa Clara Finance Authority, Calif., is selling $103.37 million of Series 2015P refunding lease revenue bonds for multiple facilities projects on Wednesday. The issue is rated AA-plus by S&P and AA by Fitch.
The last time the authority competitively sold bonds was on April 8, 2014, when Morgan Stanley won $11.72 million of Series 2014 O refunding lease revenue bonds for multiples facilities projects with a TIC of 1.92%.
The Week's Most Actively Quoted Issues
Puerto Rico, New York and California names were among some of the most actively quoted issues in the week ended May 15, according to data released by Markit.
On the bid side, the Puerto Rico Aqueduct and Sewer Authority 6s of 2044 were quoted by 13 unique dealers. On the ask side, the New York Sales Tax Asset Receivable Corp. 5s of 2029 were quoted by 17 dealers. And among two-sided quotes, the Illinois 5.1s of 2033 were quoted by 13 dealers, Markit said.
The Week's Most Actively Traded Issues
Among some of the most actively traded issues in the week ended May 15, were issuers from New Jersey, Connecticut, and Chicago, according to Markit.
In the revenue bond sector, the New Jersey Transportation Trust Fund Authority 5 1/4s of 2036 were traded 235 times. In the GO bond sector, the Connecticut 3 3/8s of 2029 were traded 118 times. And in the taxable bond sector, the Chicago Board of Education 6.519s of 2040 were traded 44 times, according to Markit.
Tax-Exempt Bond Funds See Outflows
Municipal bond funds which report weekly posted $32.398 million of outflows in the week ended May 13, after experiencing outflows of $211.078 million in the week ended May 6, according to the latest Lipper data.
The four-week moving average remained positive at $193.106 million in the latest week after being in the green at $79.627 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also saw outflows, losing $109.874 million in the latest week, after experiencing outflows of $396.088 million in the previous week.
High-yield muni funds recorded an outflow of $126.365 million in the latest reporting week, after seeing outflows of $308.950 million in the previous week. Intermediate-term funds saw inflows of $99.505 million after seeing inflows of $112.153 million in the prior week. Exchange-traded funds had outflows of $17.072 million, after recording outflows of $6.193 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $36 million of outflows in the week ended May 6, according to the Investment Company Institute. ICI reported of inflows of $1.028 billion into long-term funds in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $2.097 billion to $13.850 billion on Friday. The total is comprised of $3.947 billion competitive sales and $9.903 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 44,504 trades on Thursday on volume of $18.645 billion.
The most active bond, based on the number of trades, was the Florida Mid-Bay Bridge Authority's 2015 Series A first senior lien revenue 4s of 2040, which traded 291 times at an average price of 98.023 with an average yield of 4.127%. The bonds were initially priced at 96.14 to yield 4.25%.
