More muni volume is set to come to market on Thursday as traders await the institutional pricing of Massachusetts' $1.11 billion of general obligation bonds.
Primary Market
Bank of America Merrill Lynch is set to price the Bay State's GO deal for institutional investors after a one-day retail order period. The issue is made up of $600 million of new money consolidated loan of 2016 Series A bonds and the $507.70 million of 2016 Series A refunding bonds.
The new money bonds were priced for retail to yield from 0.76% with a 5% coupon in 2019 to 2.80% with a 5% coupon in 2038; a 2041 maturity was priced as 4s to yield 3.30%. No retail orders were taken in the 2031-2032, 2034-2037 or 2046 maturities; the 2018 maturity was offered as a sealed bid.
The refunding bonds were priced for retail to yield from 0.94% with a 3% coupon in 2020 to 3.13% with a 3% coupon in 2033. No retail orders were taken in the 2027-2032 maturities; the 2016 maturity was offered as a sealed bid.
The issue is rated Aa1 by Moody's Investors Service, and AA-plus by Standard & Poor's and Fitch Ratings.
JPMorgan is expected to price the Los Angeles County Public Work Financing Authority's $246.26 million of Series 2016D lease revenue bonds. The deal is rated A1 by Moody's, AA by S&P and AA-minus by Fitch.
In the competitive arena, Fremont Unified School District, Calif., is selling $130 million of Series B Election of 2014 GOs. The deal is 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 $822.9 million to $7.91 billion on Thursday. The total is comprised of $3.82 billion of competitive sales and $4.83 billion of negotiated deals.
Secondary Market
Treasuries were narrowly mixed on Thursday. The yield on the two-year Treasury was unchanged from 0.85% on Wednesday, while the 10-year Treasury yield was flat from 1.85% and the 30-year Treasury bond yield decreased to 2.68% from 2.69%.
Top-rated munis ended weaker on Wednesday. The yield on the 10-year benchmark muni general obligation rose two basis points to 1.83% from 1.81% on Tuesday, while the 30-year muni yield rose one basis point to 2.87% from 2.86%, 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 99.2% compared to 98.8% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.8% versus 105.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 44,070 trades on Wednesday on volume of $12.32 billion.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $4.49 billion, bringing total net assets to $238.97 billion in the week ended Feb. 29, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $619.9 million to $243.46 billion in the previous week.
The average, seven-day simple yield for the 354 weekly reporting tax-exempt funds remained at 0.01% for the 148th straight week.
The total net assets of the 939 weekly reporting taxable money funds increased $9.30 billion to $2.565 trillion in the week ended March 1, after an inflow of $34.79 billion to $2.556 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.10% for the fourth week in a row.
Overall, the combined total net assets of the 1,293 weekly reporting money funds rose $4.81 billion to $2.804 trillion in the period ended March 1, which followed an inflow of $35.41 million to $2.799 trillion.
