The municipal bond traders were set Friday to close the books on the smallest weekly slate since the holiday shortened Thanksgiving week.
The week's volume was reduced by interest rate concerns surrounding the Federal Open Market Committee decision on Wednesday to raise the benchmark rate by 25 basis points.
The upcoming muni calendar will make this week's deal flow look like Niagara Falls compared to the Sahara Desert. There is only one negotiated deal on the Dalcomp calendar – and it's for under $40 million – while there are only a handful of competitive sales up for bid, none of which are over $5 million
In early action on Friday morning, munis were stronger as yields on some maturities were as many as three basis points lower, according to traders.
Secondary Market
Municipals ended stronger on Thursday and continued that way this morning. The yield on the 10-year benchmark muni general obligation was as down as many as two basis points from 1.95% on Thursday, while the 30-year yield was anywhere from one to three basis points lower from 2.84% on Thursday, according to a morning read of Municipal Market Data's triple-A scale.
U.S. Treasury bonds were stronger on Friday as the yield on the two-year yield fell to 0.97x% from 0.99% on Wednesday, while the 10-year Treasury was lower to 2.20% from 2.24% and the 30-year Treasury yield decreased to 2.91% from 2.94%.
The 10-year muni to Treasury ratio was calculated on Thursday at 84.7% compared to 86.5% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.8% compared to 96.2%, according to MMD.
The Week's Primary Market
Jacksonville, Fla., competitively sold $200.27 million of transportation refunding revenue bonds, as Wells Fargo Securities won the bidding war with a true interest cost of 3.2%. The deal was rated A1 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Citigroup priced the New York Transportation Development Corp.'s $167.23 million of Series 2015 special facility revenue refunding bonds for the Terminal One Group Association Project. The issue, which was subject to alternative minimum tax, was rated Baa1 by Moody's and A-minus by Fitch.
RBC Capital Markets priced the Spring Independent School District, Texas' $139.68 million of Series 2015 unlimited tax refunding bonds. The deal was wrapped by Permanent School Fund guarantee program and was rated triple-A by both Moody's and S&P.
Barclays Capital priced the Utah Housing Corp.'s $114.58 million of Series 2015D single-family mortgage bonds, consisting of $52.65 million of D-1 Class III bonds subject to the alternative minimum tax and $61.94 million of Series D-2 Class III non-AMT bonds. The deal was rated Aa3 by Moody's and AA-minus by S&P and Fitch Ratings.
RBC Capital Markets priced the Ohio Water Development Authority's $105.13 million of Series 2015B water pollution control loan fund revenue refunding bonds. The bonds were rated triple-A by Moody's and S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,269 trades on Thursday on volume of $8.907 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $524.4 million to $2.46 billion on Friday. The total is comprised of $836.5 million competitive sales and $1.63 billion of negotiated deals.
