After a busy week of heavy new issuance, traders catch a break for a day before heading into the upcoming week which features more sales of size from California and New York issuers.
Secondary Market
Treasuries were mixed on Friday. The yield on the two-year Treasury was unchanged from 0.84% on Thursday, while the 10-year Treasury yield was flat from 1.84% and the 30-year Treasury bond yield increased to 2.68% from 2.66%.
Top-shelf municipal bonds ended weaker on Thursday. The yield on the 10-year benchmark muni general obligation rose three basis points to 1.86% from 1.83% on Wednesday, while the 30-year muni yield rose one basis point to 2.88% from 2.87%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Thursday at 102.2% compared to 99.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 108.3% versus 106.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,107 trades on Thursday on volume of $11.26 billion.
The Week's Most Actively Quoted Issues
California and Maryland issues were among some of the most actively quoted names in the week ended March 4, according to data released by Markit.
On the bid side, the California taxable 7.55s of 2039 were quoted by 13 unique dealers. On the ask side, the Maryland Health and Higher Educational Facilities Authority revenue 4s of 2042 were quoted by 20 unique dealers. And among two-sided quotes, California taxable 7.3s of 2039 were quoted by 12 dealers.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended March 4 were in California, New York and Ohio, according to Markit.
In the GO bond sector, the Los Angeles Unified School District, Calif. 4s of 2040 traded 31 times. In the revenue bond sector, the New York City Municipal Water Finance Authority 4s of 2038 traded 136 times. And in the taxable bond sector, the Ohio State University 3.798s of 2046 traded 64 times, Markit said.
The Week’s Primary Market
Next week, the market will see a $2.3 billion general obligation bond sale from the state of California and a $1.3 billion offering from New York’s Empire State Development.
This week, Citigroup priced the Los Angeles Unified School District’s $1.23 billion of general obligation and refunding bonds, consisting of $648.96 million of Election of 2008 Series 2016A GO dedicated unlimited ad valorem property tax bonds and $577.40 million of Series 2016A GO refunding dedicated unlimited ad valorem property tax bonds. The deal is rated Aa2 by Moody’s Investors Service, AAA by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
Bank of America Merrill Lynch priced Massachusetts’ $1.12 billion of general obligation bonds. The issue is rated Aa1 by Moody’s and AA-plus by Standard & Poor’s and Fitch.
Citigroup priced the Kentucky State Property and Buildings Commission’s $677.33 million of Series A Project No. 112 revenue bonds and Series B Project 112 revenue refunding bonds. The deal is rated Aa3 by Moody’s, A by S&P and A-plus by Fitch.
Barclays Capital priced the New York Utility Debt Securitization Authority’s $637.64 million of Series 2016A tax-exempt restructuring bonds. The deal is rated triple-A by Moody’s, S&P and Fitch.
Wells Fargo Securities priced the New York Metropolitan Transportation Authority’s $579.96 million of Series 2016A dedicated tax fund refunding bonds. The bonds are rated AA by S&P and Fitch.
Wells Fargo priced the San Diego Public Facilities Financing Authority’s $404.20 million of Series 2016A senior sewer revenue refunding bonds, payable solely from installment payments secured by wastewater system net revenue. The deal is rated AA by S&P and Fitch.
Morgan Stanley priced the Fairfax County Economic Development Authority, Va.’s $168.30 million of Series 2016 transportation district improvement revenue refunding bonds for the Silver Line Phase I Project. The bonds are rated Aa1 by Moody’s and AA by S&P and Fitch.
Barclays Capital priced Ohio State University’s $600 million of taxable Series 2016A general receipts bonds. The deal is rated Aa1 by Moody’s and AA by S&P and Fitch.
Piper Jaffray priced the West Contra Costa Unified School District, Calif.’s $190.94 million of GO and GO refunding bonds. The bonds are rated Aa3 by Moody’s, AA-minus by S&P and AA-plus by Fitch.
Morgan Stanley priced the California Educational Facilities Authority’s $100 million of Series 2016 revenue bonds for Pepperdine University. The bonds are rated Aa3 by Moody’s and AA by S&P and Fitch.
Wells Fargo priced the State University of New Jersey, Rutgers’ $164.61 million of Series 2016M GO refunding bonds. The bonds are rated Aa3 by Moody’s, A-plus by S&P and AA-minus by Fitch.
Citigroup priced the Greenwood Fifty School Facilities Inc.’s $110.17 million of Series 1016 installment purchase refunding revenue bonds for the Greenwood School District No. 50, S.C. The bonds are insured by Build America Mutual and rated AA by S&P.
Wells Fargo priced the Miami-Dade County School Board, Fla.’s $100.56 million of Series 2016C certificates of participation. The bonds are rated A1 by Moody’s and A by Fitch.
JPMorgan priced the Orange County School Board, Fla.’s $218.87 million of Series 2016B and C certificates of participation. The issue is rated Aa2 by Moody’s and AA by Fitch.
Citi priced the New York City Municipal Water Authority’s $352.86 million of Fiscal 2016 Subseries CC-1 water and sewer system second general resolution revenue bonds. The deal is rated Aa1 by Moody’s, and AA-plus by S&P and Fitch.
Barclays priced the California Statewide Communities Development Authority’s $282.84 million of Series 2016 student housing refunding revenue bonds for the UC Irvine Campus Apartments. The deal is rated Baa1 by Moody’s.
JPMorgan priced the Los Angeles County Public Work Financing Authority’s $257.26 million of Series 2016D lease revenue bonds. The deal is rated A1 by Moody’s, AA by S&P and AA-minus by Fitch.
RBC Capital Markets priced the Omaha Public Power District, Neb.’s $103.69 million of Series 2016A separate electric system revenue bonds. The bonds were rated A1 by Moody’s and A-plus by S&P.
In the competitive arena, Delaware sold three issues totaling $237.36 million. Morgan Stanley won the $180.39 million of Series 2016A GOs with a true interest cost of 2.45%. Bank of America Merrill Lynch won the $37.15 million of Series 2016C GO refunding bonds with a TIC of 1.63%. JPMorgan Securities won the $20.22 million of Series 2016B AMT GOs with a TIC of 0.68%. All three sales are rated triple-A by Moody’s, S&P and Fitch.
The Orange County Sanitation District, Calif., sold $145.88 million of Series 2016A wastewater refunding revenue bonds. Barclays won the deal with a TIC of 3.02%. The deal is rated triple-A by S&P and Fitch.
Fremont Unified School District, Calif., competitively sold $130 million of Series B Election of 2014 GOs. Morgan Stanley won the issue with a TIC of 3.36%. 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 $3.55 billion to $11.47 billion on Friday. The total is comprised of $2.85 billion of competitive sales and $8.61 billion of negotiated deals.
Muni Bond Funds See Inflows for 22nd Straight Week
Municipal bond funds reported inflows for the 22nd straight week, according to Lipper data released on Thursday. Weekly reporting funds saw $212.255 million of inflows in the week ended March 2, after inflows of $696.392 million in the previous week, Lipper said.
The four-week moving average remained positive at $629.577 million after being in the green at $744.844 million 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 $202.928 million in the latest week after inflows of $654.431 million in the previous week. Intermediate-term funds had inflows of $143.242 million after inflows of $80.040 million in the prior week.
National funds saw inflows of $128.892 million after inflows of $589.237 million in the prior week. High-yield muni funds reported inflows of $27.310 million in the latest reporting week, after inflows of $245.834 million the previous week.
Exchange traded funds saw inflows of $87.289 million, after inflows of $173.593 million in the previous week.
