Municipal bond traders are set for the institutional pricings on Thursday of deals from New York’s Long Island Power Authority and the state of Hawaii.
Bank of America Merrill Lynch will price LIPA’s $985.3 million of Series 2015 restructuring bonds issued through the Utility Debt Securitization Authority after holding a one-day retail order period on the offering.
The UDSA bonds, due June 15 and Dec. 15, were priced for retail to yield from 1.48% with a 5% coupon in 2023 to 3.39% with a 4% coupon in a split 2037 maturity. No retail orders were taken in the 2028 or 2033 through 2036 maturities.
The deal was rated triple-A by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.
BAML is also set to price the state of Hawaii’s $747.69 million of Series 2015 general obligation bonds, Series ET, EU, EV, EW, EX, EY, EZ and FA for institutions after a retail order period.
The $190 million of series ET bonds were priced for retail to yield from 0.84% with a 4% coupon in 2018 to 3.48% with a 3.25% coupon in 2032. No retail orders were taken in the 2030-2031 or 2033-2035 maturities. The $35 million of Series EU green bonds were priced to yield from 0.84% with a 2% coupon in 2018 to 3.63% with a 3.50% coupon in 2035. The $23.645 million of Series EX bonds were priced to yield from 1.34% with a 4% coupon in 2020 to 2.28% with a 3% coupon in 2025.
The $8.7 million of Series EV bonds were offered as a sealed bid. The $34.75 million of Series WW bonds, the $213.615 million of Series EY bonds and $216.975 million of Series EZ bonds were not offered to retail investors. There’s also a $25 million tranche of Series FA taxable bonds.
The deal was rated Aa2 by Moody’s and AA by S&P and Fitch.
Secondary Trading
Treasury prices were lower on Thursday, with the yield on the two-year Treasury rising to 0.59% from 0.55% on Wednesday, while the 10-year yield rose to 2.02% from 1.98% and the 30-year yield increased to 2.86% from 2.84%.
On Wednesday, muni prices ended stronger. The yield on the 10-year benchmark muni general obligation was three basis points weaker at 2.01% from 2.04% on Tuesday, while the yield on the 30-year GO was three basis points weaker at 3.06% from 3.09%, 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 101.6% versus 99.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 107.9% compared to 106.7%, according to MMD.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $64.8 million, bringing total net assets to $246.88 billion in the period ended Oct. 12, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $2.99 billion to $246.95 billion in the previous week.
The average, seven-day simple yield for the 377 weekly reporting tax-exempt funds remained at 0.01% for the 128th straight week.
The total net assets of the 950 weekly reporting taxable money funds rose $12.52 billion to $2.479 trillion in the period ended Oct. 13, after an inflow of $8.17 billion to $2.466 trillion the previous week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 39th week in a row.
Overall, the combined total net assets of the 1,327 weekly reporting money funds increased $12.46 billion to $2.725 trillion in the period ended Oct.13, which followed an inflow of $11.17 billion to $2.713 trillion the week before.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,335 trades on Wednesday on volume of $7.028 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $244.1 million to $10.64 billion on Tuesday. The total is comprised of $3.61 billion competitive sales and $7.02 billion of negotiated deals.
