Municipal bond traders were going through their books and recording trades and inventory for this week while preparing for the week ahead.
Secondary Market
Treasuries were lower. The yield on the two-year Treasury rose to 0.87% from 0.83% on Thursday, while the 10-year Treasury yield gained to 2.07% from 2.02% and the 30-year Treasury bond yield increased to 2.84% from 2.80%.
On Thursday, prices of top-rated municipal bonds closed weaker. The yield on the 10-year benchmark muni general obligation rose one basis point to 1.72% from 1.71% on Wednesday, while the 30-year muni yield climbed three basis points to 2.71% from 2.68%, according to a final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Thursday at 83.4% compared to 86.0% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.0% versus 97.0%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,581 trades on Thursday on volume of $9.03 billion.
Primary Market
The market saw a slew of new deals hit the screens during the week both in the negotiated and competitive sectors.
The largest deals came from Washington state, which offered two competitive transactions totaling $672.57 million. JPMorgan Securities won the $528.83 million of Series R-2016B various purpose general obligation refunding bonds with a true interest cost of 2.69%. JPMorgan also won the $143.74 million of Series R-2016C motor vehicle tax GO refunding bonds with a TIC of 2.84%. Both series were rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
The Florida DOT sold $173.39 million of Series 2016A turnpike revenue refunding bonds. Bank of America Merrill Lynch won the issue with a TIC of 2.87%. The bonds were rated Aa3 by Moody's and AA-minus by Fitch.
The Board of Regents of the University of Houston System sold two deals totaling $285.495 million. Bank of America Merrill Lynch won the $101.145 million of Series 2016A tax-exempt consolidated revenue and refunding bonds with a true interest cost of 2.81%. Raymond James won the $184.350 million of Series 2016B taxable consolidated revenue and refunding bonds with a TIC of 3.14%. Both sales were rated Aa2 by Moody's and AA by S&P.
The University of Kentucky sold two issues totaling $158.11 million. Both series were rated Aa2 by Moody's and AA by S&P. Hutchinson, Shockey won the $109.26 million of Series 2016A general receipts bonds with a TIC of 3.60%. JPMorgan won the $48.85 million of Series 2016B taxable general receipts bonds with a TIC of 2.86%.
The Rosemount-Apple Valley Independent School District No. 196, Minn., sold $121.30 million Series 2016A GO school building bonds under the Minnesota School District enhancement program. Bank of America Merrill Lynch won the bonds with a TIC of 2.09%. The issue was rated Aa1 by Moody's and AA-plus by S&P.
In the negotiated arena, JPMorgan Securities priced the Massachusetts Development Finance Agency's $424.35 million of Series 2016Q revenue bonds for the Partners HealthCare System. The bonds were rated Aa3 by Moody's, AA-minus by S&P and AA by Fitch.
Morgan Stanley priced the DFA's $169.65 million of Series 2016I revenue bonds for the University of Massachusetts Memorial Health Care Obligated Group. That deal was rated triple-B-plus S&P and A-minus by Fitch.
Citigroup priced the New York Triborough Bridge & Tunnel Authority $541.235 million of Series 2016A MTA bridges and tunnels general revenue bonds. The bonds were rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings and AA by Kroll Bond Rating Agency.
Since 2006, the TBTA has sold about $8.8 billion of bonds, with the most issuance occurring in 2008 and 2012 when it issued $2.19 billion and $1.79 billion, respectively. The authority has issued bonds roughly three times a year since 2006.
Loop Capital Markets priced the District of Columbia Water and Sewer Authority's $385.61 million of Series 2016A public utility subordinate lien revenue refunding bonds. The issue was rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Wells Fargo Securities priced the Aldine Independent School District, Harris County, Texas' $261.76 million of Series 2016 unlimited tax school building and refunding bonds. The bonds were backed by the Permanent School Fund guarantee program and rated triple-A by both Moody's and S&P.
Raymond James priced the Rockwall Independent School District, Texas' $107.96 million of Series 2016 unlimited tax school building bonds. The deal was backed by the PSF and rated triple-A by Moody's and S&P.
JPMorgan priced the Indiana Finance Authority's $163.40 million of Series 2016A hospital revenue refunding bonds for the Indiana University Health Obligated Group. The issue was rated Aa3 by Moody's, AA-minus by S&P and AA by Fitch.
Citi priced the Vermont Educational and Health Buildings Financing Agency's $176.56 million of revenue bonds for the University of Vermont Medical Center Project. The deal was rated A3 by Moody's and A-minus by both S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $347.6 million to $8.52 billion on Friday. The total is comprised of $2.79 billion competitive sales and $5.73 billion of negotiated deals.
Municipal Bond Funds See Inflows for 16th Straight Week
Municipal bond funds reported inflows for the 16th week in a row, according to Lipper data released on Thursday.
Weekly reporting funds said they had $529.687 million of inflows in the week ended Jan. 20, after inflows of $994.911 million in the previous week, Lipper said.
The four-week moving average remained positive at $954.206 million after being in the green at $2.024 billion 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 $91.669 million in the latest week, on top of inflows of $667.366 million in the previous week. Intermediate-term funds had inflows of $502.939 million after inflows of $251.084 million in the prior week.
National funds saw inflows of $475.167 million after inflows of $920.013 million in the prior week. High-yield muni funds reported inflows of $231.066 million in the latest reporting week, after an inflow of $399.087 million the previous week.
Exchange traded funds saw inflows of $107.761 million, after inflows of $165.154 million in the previous week.
In the week ended Jan. 13, long-term, long-term municipal bond funds saw inflows, according to the Investment Company Institute. Muni funds saw $1.319 billion of inflows after $1.382 billion of inflows in the previous week, ICI reported.
