Prices of top-rated municipal bonds finished unchanged to slightly stronger on Thursday, according to traders, with yields steady to one basis point lower.
Traders saw less supply come to market as the week's new issues tapered off.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 2.24% on Wednesday, while the yield on the 30-year GO fell one basis point to 3.12% from 3.13%, according to the final read of Municipal Market Data's triple-A scale.
"For munis, activity seemed light and dealers still had a fair amount of Minnesota [general obligations] from Wednesday's competitive sales to distribute," MMD senior market analyst Randy Smolik wrote in a market comment. Minnesota sold about $1 billion of bonds in five separate sales on Wednesday.
Treasury prices were higher Thursday, with the yield on the two-year Treasury note slipping to 0.70% from 0.73% on Wednesday, while the 10-year yield fell to 2.23% from 2.27% and the 30-year yield declined to 2.91% from 2.94%.
The 10-year muni to Treasury ratio was calculated on Thursday at 100.4% versus 98.9% on Wednesday, while the 30-year muni to Treasury ratio stood at 107.3% compared to 106.5%, according to MMD.
Primary Market
Citigroup priced the Dormitory Authority of the State of New York's $509.95 million of Series 2015A revenue bonds for the Icahn School of Medicine at Mount Sinai.
The bonds were priced to yield from 0.51% with a 2.50% coupon in 2016 to 4.09% with a 4% coupon in 2036; a split 2040 term bond was prices as 5s to yield 3.94% and as 4s to yield 4.14%; a 2045 term was priced as 5s to yield 4.02%. The issue was rated A2 by Moody's Investors Service and A-minus by Standard & Poor's.
Citi also priced the Maine State Housing Authority's $108.13 million of mortgage purchase bonds. The $83.13 million of Series E-1 AMT bonds were priced at par to yield from 0.60% in 2016 to 2$ in 2030; a 2035 maturity was priced as 3 1/2s to yield 2.35%. The $25 million of Series E-2 bonds were priced at par to yield 3.80% in 2033, 4.05% in 2040, and 4.15% in 2045.
The issue was rated Aa1 by Moody's and AA-plus by S&P.
Morgan Stanley priced the first municipal green bond in Colorado as part of a larger sale of $159.05 million of system enterprise revenue bonds for Colorado State University by the Board of Governors of the University system.
The $42.06 million of Series 2015E-2 green bonds were priced as 5s to yield from 2.23% in 2023 to yield 3.29% in 2033. The $96.05 million of Series 2015E-1 revenue bonds were priced as 5s to yield from 3.29% in 2033 to 3.37% in 2035; a 2040 term was priced as 5s to yield 3.51% and a 2047 term was priced as 5s to yield 3.68%. The $16.61 million of Series 2015F revenue bonds were priced to yield from 0.28% with a 2% coupon in 2016 to 2.37% with a 3% coupon in 2023.
The Series F bonds were rated Aa3 by Moody's and A-plus by S&P. The Series E bonds were backed by the Colorado Higher Education Enhanced Program and were rated Aa2 by Moody's and AA-minus by S&P.
RBC Capital Markets received the official award on the Chicago Transit Authority's $176.92 million of capital grant receipts revenue refunding bonds.
The $131.27 million of Series 2015 Federal Transit Administration Section 5307 urbanized area formula funds bonds were priced as 5s to yield from 1.60% in 2018 to 2.54% in 2021. The $45.65 million of Series 2015 Federal Transit Administration Section 5337 state of good repair formula funds bonds were priced as 5s to yield from 1.60% in 2018 to 3.42% in 2026. The issue was rated A by Standard & Poor's and BBB by Fitch.
Siebert Brandford Shank received the written award on the Oakland Unified School District, Alameda County, Calif.'s $348.71 million of election of 2012 general obligation bonds.
The $173 million of Series 2015A GOs were priced as 5s to yield from 1.14% in 2017 to 3.97% in 2035; a 2040 term bond was priced as 5s to yield 4.10%. The $6.5 million of Series 2015B taxable GOs were priced at par to yield 1% in 2016. The $168.71 million of Series 2015 GO refunding bonds were priced as 5s to yield from 0.82% in 2016 to 3.53% in 2030. The deal was not rated except for the Series 2015 GO refunding bond 2021 through 2030 maturities, which were insured by Assured Guaranty Municipal and rated A2 by Moody's and AA by S&P.
Raymond James priced the SLO County Financing Authority, San Louis Obispo County, Calif.'s $107.12 million of Series 2015A revenue refunding bonds for the Nacimiento Water Project.
The issue was priced to yield from 1.32% with a 5% coupon in 2019 to 3.58% with a 5% coupon and 3.90% with a 3.75% coupon in a split 2034 maturity; a 2037 maturity was priced as 5s to yield 3.64% and a 2038 maturity was priced as 4s to yield 4.10%. The issue is insured by Build America Mutual and rated AA by S&P and A-plus by Fitch Ratings.
Tax-Exempt Money Market Funds Post Inflows
Tax-exempt money market funds experienced inflows of $370.2 million, bringing total net assets to $245.79 billion in the period ended Aug. 3, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $1.41 billion to $245.42 billion in the previous week.
The average, seven-day simple yield for the 384 weekly reporting tax-exempt funds remained at 0.01% for the 118th straight week.
The total net assets of the 966 weekly reporting taxable money funds rose $23.54 billion to $2.446 trillion in the period ended Aug. 4, after experiencing an outflow of $5.99 billion to $2.422 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 29th week.
Overall, the combined total net assets of the 1,350 weekly reporting money funds increased $23.91 billion to $2.692 trillion in the period ended July 28, which followed an outflow of $7.40 billion to $2.668 trillion the week before.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,368 trades on Wednesday on volume of $8.692 billion.
The most active bond on Wednesday, based on the number of trades, was the Chicago Metropolitan Pier and Exposition Authority's Series 2010B2 McCormick Place expansion project refunding 5s of 2050.
The Met Pier's top-tier rating from S&P became a victim of the Illinois budget impasse on Wednesday. With revenues pledged to service the authority's $3 billion of debt trapped by the standoff in the state capitol, S&P cut the rating seven notches to BBB-plus from triple-A. Late Wednesday, Fitch delivered its own four-notch downgrade to BBB-plus from AA-minus, citing the same rationale.
The Met Pier 5s traded 167 times on Wednesday for a total of $28.22 million at a low price of 98 cents on the dollar, a high yield of 5.123% or a high price of 103.342, a low yield of 4.227%; the average price was 99.214, with an average yield of 5.042%.
On Thursday, the 5s traded 17 times on volume of $855,000 at a low price of 97.515, a high yield of 5.154%, or a high price of 100.043, a low yield of 4.988%. This compared to Tuesday before the downgrades, when the 5s traded 35 times on volume of $2.86 million at a low price of 100, a high yield of 5.00% or a high price of 104.368, a low yield of 4.00%.
