Municipal bond market traders on Friday were looking ahead of next week's new issue slate, which is topped off by issuers from New York and New Jersey.
Secondary Market
Treasury prices were higher on Friday. The yield on the two-year Treasury note slipped to 0.54% from 0.55% on Thursday, while the 10-year yield decreased to 1.92% from 1.96% and the 30-year yield fell to 2.56% from 2.60%.
Prices of top-quality munis finished lower on Thursday. The yield on the 10-year benchmark muni general obligation rose three basis points to 1.97% from 1.94% on Wednesday, while the yield on 30-year GO was up three basis points to 2.84% from 2.81%, according to the final read of MMD's triple-A scale.
On Thursday, the 10-year muni to Treasury ratio was calculated at 100.6% versus 102.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 109.3% compared to 111.6%.
Primary Market
The Port Authority of New York and New Jersey headline next week's new issue calendar with a $775 million deal.
Bank of America Merrill Lynch is scheduled to price the authority's consolidated bonds on Tuesday after a one-day retail order period. The deal is structured to consist of 188th Series AMT bonds and 189th Series non-AMT bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Also on tap is the New York City Transitional Finance Authority, which is coming to market with bonds in the negotiated and competitive sector totaling $850 million.
Loop Capital is scheduled to price the TFA's $650 million of future tax secured subordinate bonds, Fiscal 2015 Subseries E-1 on Thursday after a two-day order period starting on Tuesday. The deal may be structured as series running from 2017 to 2035 with term bonds in 2040 and 2042. The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
On Thursday, the TFA will competitively sell $200 million of future tax secured taxable subordinate bonds, Fiscal 2015 Subseries E-2. The deal may be structured as series ranging from 2020 to 2029. The taxable are rated triple-A by Fitch.
Another New York issuer took center stage on Thursday, as the Dormitory Authority of the State of New York came to market with issues for three universities.
Morgan Stanley priced DANSY''s $692.47 million of Series 2015A revenue bonds for New York University after a one-day retail order period. Morgan Stanley also priced DASNY's $265.97 million of Series 2015B taxable revenue bonds for NYU. The NYU bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.
Goldman, Sachs received the official award on DASNY's $124.29 million of Series 2015A revenue bonds for The New School. The New School bonds are rated A3 by Moody's and A-minus by S&P.
And Goldman received the verbal award on DASNY's $47.81 million Series 2015B revenue bonds for Columbia University. The Columbia University bonds are rated triple-A by Moody's and S&P.
Tax-Exempt Bond Funds See Outflow
Municipal bond funds which report weekly, posted $32.810 million of outflows in the week ended April 8, after experiencing outflows of $300.580 million in the week ended April 1, according to the latest Lipper data.
The four-week moving average remained positive at $95.488 million in the latest week after being in the green at $141.929 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 saw inflows, gaining $227.106 million in the latest week, after experiencing outflows of $49.567 million in the previous week.
High-yield muni funds recorded an inflow of $129.963 million in the latest reporting week, after seeing inflows of $1.733 million in the previous week. Exchange-traded funds had inflows of $96.832 million, after recording inflows of $72.441 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $2.124 billion of outflows in the week ended April 1, according to the Investment Company Institute. ICI reported inflows into long-term funds of $1.770 billion in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $4.029 billion to $12.640 billion on Friday. The total is comprised of $3.941 billion competitive sales and $8.699 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,835 trades on Thursday on volume of $11.913 billion.
Most active, based on the number of trades, was the New York State Dormitory Authority's Series 2015A non-state supported debt revenue bonds for The New School, 4s of 2050, which traded 161 times at an average price of 99.831 with an average yield of 3.98%. The bonds were initially priced at 98.141 to yield 4.10%.
