Prices on top-rated municipal bonds were weaker at mid-session, traders said, with yields up by as much as two basis points, while the last of the week's large new issues came to market.
Secondary Market
Prices of top-quality munis were lower. The yield on the 10-year benchmark muni general obligation rose by as much as two basis points from 1.94% on Wednesday, while the yield on 30-year GO was up as much as by one basis point from 2.81%, according to a read of MMD's triple-A scale.
Treasury prices were lower on Thursday. The yield on the two-year Treasury note rose to 0.54% from 0.53% on Wednesday, while the 10-year yield increased to 1.92% from 1.90% and the 30-year yield rose to 2.55% from 2.53%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 102.4% versus 101.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 111.6% compared to 110.8%.
Primary Market
Morgan Stanley priced the New York State Dormitory Authority's $692.47 million of Series 2015A revenue bonds for New York University on Thursday after a one-day retail order period.
The DASNY deal was priced for institutions to yield from 0.62% with a 3% coupon in 2017 to 3.06% with a 5% coupon in 2035. A 2038 term bond was priced as 4s to yield 3.51%; a 2041 term was priced at par to yield 2.50%; a 2045 term was priced as 5s to yield 3.19% and a 2048 term was priced as 5s to yield 3.27%. The 2016 maturity was offered as a sealed bid.
On Wednesday, the deal was priced for retail to yield from 0.70% with a 3% coupon in 2017 to 3.00% with a 5% coupon in 2035. A 2038 term was priced as 4s to yield 3.47%; a 2041 term was priced at par to yield 2.50%; a 2045 bond was priced as 5s to yield 3.15% and a 2048 term was priced as 5s to yield 3.32%.
Morgan Stanley is also expected to price DASNY's $265.97 million of Series 2015B taxable revenue bonds for NYU on Thursday.
All the NYU bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.
Morgan Stanley also received the written award on the Freemont Union High School District, Santa Clara Co., Calif.'s $100 million of Series 2015 general obligation bonds. The bonds were priced to yield 0.61% with 3% and 4% coupons in a 2017 split maturity and from 2.17% with a 5% coupon in 2026 to 3.12% with a 4.50% coupon in 2035; a 2040 term bond was priced as 4s to yield 3.50% and a 2045 term was priced as 4s to yield 3.54%. The issue is rated Aa1 by Moody's and triple-A by S&P.
Tax-Exempt Money Market Funds Post Outflow
Tax-exempt money market funds had an outflow of $1.84 billion, bringing total net assets to $259.50 billion in the period ended April 6, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $521.6 million to $259.47 billion in the previous week.
The average, seven-day simple yield for the 396 weekly reporting tax-exempt funds remained at 0.01% for a 101st straight week.
The total net assets of the 991 weekly reporting taxable money funds fell $6.76 billion to $2.412 trillion in the period ended April 7, after experiencing an outflow of $42.55 billion to $2.418 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 11th consecutive week.
Overall, the combined total net assets of the 1,387 weekly reporting money funds decreased $4.92 billion to $2.671 trillion in the period ended April 7, which followed an inflow of $44.36 billion to $2.676 trillion in the prior period.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.514 billion to $8.611 billion on Wednesday. The total is comprised of $4.139 billion competitive sales and $4.472 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,277 trades on Wednesday on volume of $9.705 billion.
Most active, based on the number of trades, was the Knoxville, Tenn., Series 2015A water system revenue refunding 3 1/2s of 2040, which traded 88 times at an average price of 99.791 with an average yield of 3.505%. The bonds were initially priced at 98.00 to yield 3.622%.
