Municipal bond traders are set to see the last of the week's big name issuers hit the market on Thursday, a day after the Federal Open Market Committee left the fed funds target rate unchanged in a move widely expected.
Secondary Market
Treasuries were stronger on Thursday. The yield on the two-year Treasury declined to 0.77% from 0.79% on Wednesday, the 10-year Treasury yield dropped to 1.63% from 1.68% and the yield on the 30-year Treasury bond decreased to 2.35% from 2.41%.
Top-shelf municipal bonds finished unchanged on Wednesday. The yield on the 10-year benchmark muni general obligation was steady from 1.57% on Tuesday, while the yield on the 30-year was flat from 2.33%, according to the final read of Municipal Market Data's triple-A scale.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 94.2% compared to 93.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 93.5% versus 95.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,630 trades on Wednesday on volume of $16.12 billion.
Primary Market
In the competitive arena on Thursday, the Dormitory Authority of the State of New York will sell over $1 billion of bonds in three separate offerings.
The offerings consist of $409.16 million Series 2016A Group A state sales tax revenue bonds; $396.83 million of Series 2016A Group C state sales tax revenue bonds; and $310.94 million of Series 2016A Group B state sales tax revenue bonds.
The sales are rated triple-A by S&P.
Since 2006, DASNY has sold over $9 billion of competitive offerings. DASNY saw the most issuance was in 2015 when it put $2.11 billion of bonds out for the bid. The authority did not competitively sell bonds in 2008 or 2009.
Goldman Sachs plans to price the Pennsylvania Turnpike Commission's $649.89 million of subordinate revenue refunding bonds on Thursday.
The offering is expected to consist of $391.52 million of Subseries A bonds, $82.17 million of Subseries B taxables and $176.2 million of motor license fund enhanced bonds. The two subseries are rated A3 by Moody's and A-minus by Fitch, while the enhanced motor license series is rated A2 by Moody's and A-minus by Fitch.
Also on Thursday, Bank of America Merrill Lynch is set to price the Central Florida Expressway's $425 million of Series 2016B senior lien refunding revenue bonds. The issue is rated A2 by Moody's and A by S&P and Fitch.
Citigroup is expected to price the Turlock Irrigation District, Calif.'s $160 million of Series 2016 first priority subordinated revenue refunding bonds on Thursday. The deal is rated A-plus by Fitch.
RBC Capital Markets is expected to price the Indiana Finance Authority's $284.97 million of Series 2016D state revolving fund program green bonds and Series 2016E state revolving fund program refunding green bonds on Thursday. The deal is rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $423.5 million to $12.74 billion on Thursday. The total is comprised of $4.245 billion of competitive sales and $8.497 billion of negotiated deals.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $5.53 billion, bringing total net assets to $139.53 billion in the week ended Sept. 19, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $5.27 billion to $145.06 billion in the previous week.
The average, seven-day simple yield for the 252 weekly reporting tax-exempt funds rose to 0.21% from 0.18% in the previous week.
The total net assets of the 886 weekly reporting taxable money funds decreased $23.27 billion to $2.504 trillion in the week ended Sept. 20, after an inflow of $13.91 billion to $2.527 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.12% from the week before.
Overall, the combined total net assets of the 1,138 weekly reporting money funds fell $28.80 billion to $2.644 trillion in the period ended Sept. 13, which followed an inflow of $8.64 billion to $2.672 trillion.
