Prices of top-rated municipal bonds were weaker at mid-session, traders said, as the $1 billion deal from New York’s Long Island Power Authority came to market as did a $748 million offering from Hawaii.
Bank of America Merrill Lynch priced LIPA’s $1 billion of Series 2015 restructuring bonds issued through the Utility Debt Securitization Authority after holding a one-day retail order period on the offering.
The UDSA bonds, due June 15 and Dec. 15, were priced to yield from 1.44% with a 5% coupon in a split maturity in 2023 to 3.39% with a 4% coupon in a split 2037 maturity.
On Wednesday, the bonds were priced for retail to yield from 1.48% with a 5% coupon in a split maturity in 2023 to 3.39% with a 4% coupon in a split 2037 maturity. No retail orders were taken in the 2028 or 2033 through 2036 maturities.
The deal was rated triple-A by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.
BAML also priced the state of Hawaii’s $747.69 million of Series 2015 general obligation bonds, Series ET, EU, EV, EW, EX, EY, EZ and FA for institutions after a retail order period on Wednesday.
The $190 million of series ET bonds were priced for retail to yield from 0.87% with a 4% coupon in 2018 to 3.48% with a 4% coupon in 2035. The $35 million of Series EU green bonds were priced to yield from 0.84% with a 2% coupon in 2018 to 3.60% with a 3.50% coupon in 2035. The $23.645 million of Series EX bonds were priced to yield from 1.09% with a 4% coupon in 2019 to 2.29% with a 3% coupon in 2025.
The $8.7 million of Series EV bonds were offered as a sealed bid. The $34.75 million of Series WW bonds were priced as a 2018 bullet maturity as 5s to yield 0.87%. The $213.615 million of Series EY bonds were priced as 5s to yield from 1.36% in 2020 to 2.54% in 2027. The $216.975 million of Series EZ bonds were priced as 5s to yield from 1.09% in 2019 to 2.64% in 2028. The $25 million of Series FA taxable bonds were priced at par to yield from 1.35% in 2018 to 4.33% in 2035.
The deal was rated Aa2 by Moody’s and AA by S&P and Fitch.
Piper Jaffray priced the Texas Public Finance Authority’s $369.8 million of Series 2015C taxable general obligation and refunding bonds. The issue was priced at par to yield from 0.35% in 2016 to 4.108% in 2035.
The issue was rated triple-A by Moody’s, S&P and Fitch.
Secondary Trading
Municipal bond prices were weaker. The yield on the 10-year benchmark muni general obligation was as much as one basis point stronger from 2.01% on Wednesday, while the yield on the 30-year GO was as much as one basis point stronger from 3.06%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Thursday, with the yield on the two-year Treasury rising to 0.59% from 0.55% on Wednesday, while the 10-year yield rose to 2.01% from 1.98% and the 30-year yield increased to 2.86% from 2.84%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 101.6% versus 99.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 107.9% compared to 106.7%, according to MMD.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $64.8 million, bringing total net assets to $246.88 billion in the period ended Oct. 12, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $2.99 billion to $246.95 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 128th straight week.
The total net assets of the 950 weekly reporting taxable money funds rose $12.52 billion to $2.479 trillion in the period ended Oct. 13, after an inflow of $8.17 billion to $2.466 trillion the previous week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 39th week in a row.
Overall, the combined total net assets of the 1,327 weekly reporting money funds increased $12.46 billion to $2.725 trillion in the period ended Oct.13, which followed an inflow of $11.17 billion to $2.713 trillion the week before.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,335 trades on Wednesday on volume of $7.028 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $244.1 million to $10.64 billion on Tuesday. The total is comprised of $3.61 billion competitive sales and $7.02 billion of negotiated deals.
