Prices of top-shelf municipal bonds were stronger at mid-session, traders said, with yields on some longer-dated maturities falling by as much as two basis points.
Meanwhile, traders on Friday were looking ahead of next week's new issue slate, which is estimated to total about $8.84 billion. There are $6.60 billion of negotiated deals set for next week, according to Ipreo and The Bond Buyer; this compares to a revised $4.52 billion this week, according to Thomson Reuters. Bonds scheduled for competitive sale next week total $2.24 billion versus a revised $1.99 billion this week.
Secondary Market
Prices of top-quality munis were higher at midday. The yield on the 10-year benchmark muni general obligation was down by as much as one basis point from 1.97% on Thursday, while the yield on 30-year GO was off as much as two basis points from 2.84%, according to a read of MMD's triple-A scale.
Treasury prices were higher on Friday. The yield on the two-year Treasury note slipped to 0.54% from 0.55% on Thursday, while the 10-year yield decreased to 1.94% from 1.96% and the 30-year yield fell to 2.57% from 2.60%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 100.6% versus 102.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 109.3% compared to 111.6%.
Primary Market
The Port Authority of New York and New Jersey headline will headline next week's new issue calendar with a $775 million deal.
Bank of America Merrill Lynch is scheduled to price the authority's consolidated bonds on Tuesday after a one-day retail order period. The deal is structured to consist of 188th Series AMT bonds and 189th Series non-AMT bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Also on tap is the New York City Transitional Finance Authority, which is coming to market with bonds in the negotiated and competitive sector totaling $850 million.
Loop Capital is scheduled to price the TFA's $650 million of future tax secured subordinate bonds, Fiscal 2015 Subseries E-1 on Thursday after a two-day order period starting on Tuesday. The deal may be structured as series running from 2017 to 2035 with term bonds in 2040 and 2042. The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
On Thursday, the TFA will competitively sell $200 million of future tax secured taxable subordinate bonds, Fiscal 2015 Subseries E-2. The deal may be structured as series ranging from 2020 to 2029. The taxable are rated triple-A by Fitch.
Tax-Exempt Bond Funds See Outflow
Municipal bond funds which report weekly, posted $32.810 million of outflows in the week ended April 8, after experiencing outflows of $300.580 million in the week ended April 1, according to the latest Lipper data.
The four-week moving average remained positive at $95.488 million in the latest week after being in the green at $141.929 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds saw inflows, gaining $227.106 million in the latest week, after experiencing outflows of $49.567 million in the previous week.
High-yield muni funds recorded an inflow of $129.963 million in the latest reporting week, after seeing inflows of $1.733 million in the previous week. Exchange-traded funds had inflows of $96.832 million, after recording inflows of $72.441 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $2.124 billion of outflows in the week ended April 1, according to the Investment Company Institute. ICI reported inflows into long-term funds of $1.770 billion in the previous week.
The Week's Most Actively Quoted Issues
Puerto Rico and New York names were among the most actively quoted issues in the week ended April 10, according to data released by Markit.
On the bid side, the Puerto Rico Aqueduct and Sewer Authority revenue bonds 5 1/4s of 2042 were quoted by 10 unique dealers. On the ask side, the New York City Municipal Water Finance Authority's water and sewer system revenue 5s of 2039 were quoted by 15 dealers. And among two-sided quotes, the Puerto Rico commonwealth 8s of 2035 were quoted by eight dealers, Markit said.
The Week's Most Actively Traded Issues
Among the most actively traded issues in the week ended April 10, were issuers from California and Massachusetts, according to Markit.
In the GO bond sector, Massachusetts 3s of 2025 were traded 33 times. In the revenue bond sector, the California state Department of Water Resources power supply 5s of 2022 were traded 120 times. And in the taxable bond sector, the University of California revenue 4.767s of 2015 were traded 27 times, according to Markit.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $4.029 billion to $12.640 billion on Friday. The total is comprised of $3.941 billion competitive sales and $8.699 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,835 trades on Thursday on volume of $11.913 billion.
Most active, based on the number of trades, was the New York State Dormitory Authority's Series 2015A non-state supported debt revenue bonds for The New School, 4s of 2050, which traded 161 times at an average price of 99.831 with an average yield of 3.98%. The bonds were initially priced at 98.141 to yield 4.10%.
