Prices of top-quality municipal bonds finished weaker on Thursday, according to traders, as the market saw more new deals hit the screens, topped by the North Texas Tollway Authority System's $768 million bond sale.
Barclays Capital priced and repriced the biggest deal of the week - the NTTA's Series 2015B first-tier revenue refunding bonds.
The issue was repriced as 5s to yield from 0.19% in 2016 to 3.71% in 2034; a 2035 maturity was priced as 4s to yield approximately 4.056%, a 2040 maturity was priced as 5s to yield 3.92% and a 2045 maturity was priced as 5s to yield 4%.
Moody's Investors Service raised its rating on the authority to A1 from A2 on Aug. 27 and Standard & Poor's increased its rating to A from A-minus on Aug. 28.
The NTTA board authorized refunding of up to $1 billion of debt issued in 2008. Chief financial officer Horatio Porter told The Bond Buyer last week the deal was likely to end up in the $760 million range. At that size, NTTA will have refunded about $1.7 billion of debt in 2015. The authority doesn't expect to issue any more bonds this year.
In the short-term market, JPMorgan Securities priced and repriced the Detroit School District's $121 million of Series 2015E junior subordinate lien obligations. The state aid revenue notes were issued through the Michigan Finance Authority.
The notes, due Aug. 22, 2016, were repriced at par to yield 5.75%. A preliminary pricing had the notes offered at par to yield 5.50%.
The district needed to issue the one-year notes to cover its operating cash flow through next August. S&P gave the notes an SP-3 rating, its lowest short-term designation.
RBC Capital Markets priced the University of Oklahoma's $207 million of tax-exempt general revenue bonds.
The Series 2015C tax-exempts were priced to yield from 3.05% with 3% and 3.125% coupons in a split 2026 maturity to 4.09% with a 4% coupon in 2040. A 2045 term bond was priced as 4s to yield 4.15%.
Proceeds of the sale will go toward redesign of the university's football stadium in Norman, Okla. The bonds, issued through the Oklahoma Capitol Improvement Authority, were rated A-plus by S&P and AA-minus by Fitch Ratings.
Bank of America Merrill Lynched priced the University of Hawaii's $167.29 million of revenue bonds in five series. The issue was rated Aa2 by Moody's A-plus by S&P and AA by Fitch.
The $8.575 million of Series 2015A taxable revenue bonds were priced at par to yield from 1.048% in 2016 to 4.324% in 2032. Term bonds in 2035, 2040 and 2044 had yields of 4.593%, 4.643% and 4.693%, respectively. The $47.94 million of Series 2015B refunding bonds were priced to yield from 2.15% with a 5% coupon in 2022 to 3.87% with a 3.75% coupon and 3.48% with a 5% coupon in a split 2036 maturity. The $17.6 million of Series 2015C taxable revenue refunding bonds were priced at par to yield from 0.811% and 1.048% in a split 2016 maturity to 3.035% in 2022.
The $25.73 million of Series 2015D taxable revenue refunding bonds for the medical school were priced at par to yield from 0.811% and 1.048% in a split 2016 maturity to 2.835% in 2021. The $67.46 million of Series 2015E revenue refunding forward delivery bonds for the medical school were priced as 5s to yield 2.49% in 2021 to 3.39% in 2026. The bonds were also priced as 5s to yield 3.71% in 2029 to 3.92% in 2032.
Secondary Trading
The yield on the 10-year benchmark muni general obligation on Thursday finished one basis point stronger at 2.23% from 2.22% on Wednesday, while the yield on the 30-year GO was three basis points stronger at 3.20% from 3.17%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mostly lower on Thursday, with the yield on the two-year Treasury note remaining unchanged from 0.74% on Wednesday, while the 10-year yield rose to 2.22% from 2.19% and the 30-year yield increased to 2.99% from 2.95%.
The 10-year muni to Treasury ratio was calculated on Thursday at 101.1% versus 101.9% on Wednesday, while the 30-year muni to Treasury ratio stood at 107.0% compared to 107.8%, according to MMD.
Tax-Exempt Money Market Funds Saw Inflows
Tax-exempt money market funds experienced inflows of $2.23 billion, bringing total net assets to $248.92 billion in the period ended Sept. 7, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $810.7 million to $246.69 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 123rd straight week.
The total net assets of the 949 weekly reporting taxable money funds fell $13.42 billion to $2.427 trillion in the period ended Sept. 8, after experiencing an outflow of $28.53 billion to $2.440 trillion the previous week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 34th week in a row.
Overall, the combined total net assets of the 1,326 weekly reporting money funds decreased $11.19 billion to $2.675 trillion in the period ended Sept. 1, which followed an outflow of $29.34 billion to $2.687 trillion the week before.
