Municipal bond prices were weaker at mid-session, traders said, with yields strengthening by one to three basis points.
Next week, an estimated $5.1 billion of new supply will come to market, according to Ipreo, which consists of $4.0 billion of negotiated deals and $1.1 billion of competitive sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation strengthened by one to three basis points from 2.01% on Thursday, while the yield on the 30-year GO was as much as two basis points stronger from 3.05%, according to the a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Friday, with the yield on the two-year Treasury rising to 0.63% from 0.59% on Thursday, while the 10-year yield rose to 2.08% from 2.01% and the 30-year yield increased to 2.90% from 2.84%.
The 10-year muni to Treasury ratio was calculated on Thursday at 99.3% versus 99.6% on Wednesday, while the 30-year muni to Treasury ratio stood at 106.6% compared to 106.7%, according to MMD.
The Week’s Primary Market
The primary saw a lot of action during the week, which started off as the New York City Transitional Finance Authority came to market with about $1 billion of bonds.
JPMorgan Securities priced the NYC TFA’s $750 million of future tax-secured tax-exempt subordinate bonds for institutions after holding a two-day retail order period.
“The TFA received approximately $219 million of retail orders for the tax-exempt bonds during the two-day retail order period preceding Wednesday’s sale,” the authority said in a press release. “During Wednesday’s institutional order period, the TFA received over $1.4 billion of priority orders from institutional investors for the approximately $499 million of bonds offered to them. At the final pricing, strong investor demand made it possible to reduce yields by up to 6 basis points in 10 maturities.”
The TFA also sold $250 million of bonds in two competitive sales. RBC Capital Markets won the $201.66 million of Series B, Subseries B-2 taxable bonds while Wells Fargo Securities won the $48.34 million of Series B, Subseries B-3 taxable bonds.
The TFA issues were rated Aa1 by Moody’s Investors Service and triple-A by both Standard & Poor’s and Fitch Ratings.
Citigroup priced the New Jersey Turnpike Authority’s $750 million of revenue bonds. The issue was rated A3 by Moody’s, A-plus by S&P and A by Fitch.
Morgan Stanley priced the North Carolina Capital Facilities Finance Agency’s $370.87 million of Series 2015B revenue bonds for Duke University. The deal was rated Aa1 by Moody’s and AA-plus by S&P.
Bank of America Merrill Lynch priced Harris County, Texas’ $329.29 million bond offering. The issue was rated triple-A by Moody’s and S&P.
RBC Capital Markets priced the Tacoma School District No. 10, Pierce County, Wash.’s $368.28 million of Series 2015 unlimited tax general obligation and refunding bonds. The issue was backed by the Washington State School District Credit Enhancement Program and rated Aa1 by Moody’s and AA-plus by S&P.
Morgan Stanley priced the California Health Facilities Financing Authority’s $189.17 million of Series 2015A refunding revenue bonds for Sutter Health. The bonds were rated Aa3 by Moody’s and AA-minus by S&P and Fitch.
In the competitive arena, the state of California sold $960.96 million of various purpose general obligation and refunding bonds in three separate competitive sales. Citigroup won the $532.5 million of Bid Group C tax-exempt various purpose refunding GOs, Goldman Sachs won the $322.5 million of Bid Group B tax-exempt various purpose refunding GOs, and JPMorgan won the $105.96 million of Bid Group A taxable various purpose GOs. All three offerings were rated Aa3 by Moody’s, AA-minus by S&P and A-plus by Fitch.
The state of Ohio sold $300 million Series 2015C higher education GOs to winner bidder Citigroup. The bonds were rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
Municipal Bond Funds See Inflows Again
Municipal bond funds reported inflows for the third week in a row, according to Lipper data released on Thursday.
Weekly reporting funds experienced $240.718 million of inflows in the week ended Oct. 21, after inflows of $520.807 million in the previous week, Lipper said.
The latest inflow brings to 22 out of 43 weeks this year that the funds have seen cash flowing in. Inflows for the year to date remain in the green, totaling over $2.7 billion.
The four-week moving average remained positive at $305.770 million after being in the green at $303.404 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 $386.074 million in the latest week, on top of inflows of $400.314 million in the previous week. However, intermediate-term funds had outflows of $78.649 million after inflows of $47.494 million in the prior week.
High-yield muni funds reported inflows of $280.664 million in the latest reporting week, after an inflow of $206.815 million the previous week.
Exchange traded funds saw inflows of $92.863 million, after inflows of $38.337 million in the previous week.
The Week's Most Actively Quoted Issues
New York, New Jersey and Puerto Rico were some of the most actively quoted names in the week ended Oct. 23 according to data released by Markit.
On the bid side, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 12 unique dealers. On the ask side, the Port Authority of New York & New Jersey revenue 5s of 2035 were quoted by 18 dealers. And among two-sided quotes, Puerto Rico commonwealth GO 8s of 2035 were quoted by 13 dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues in the week ended Oct. 23 were in New York, Puerto Rico and Florida, according to Markit.
In the revenue bond sector, the Utility Debt Securitization Authority, N.Y., LIPA 5s of 2036 were traded 81 times. In the GO bond sector, the Puerto Rico commonwealth GO 8s of 2035 were traded 44 times. And in the taxable bond sector, the Florida Hurricane Catastrophe Fund Finance Corp. 2.995s of 2020 were traded 14 times, Markit said.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,857 trades on Thursday on volume of $8.91 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $968 million to $9.19 billion on Friday. The total is comprised of $2.54 billion competitive sales and $6.64 billion of negotiated deals.
