Municipal bond traders are looking to see the last of the week’s supply come to market on Thursday. The institutional pricing of the Massachusetts Water Resources Authority deal is set to hit the screens.
Secondary Market
U.S. Treasuries were weaker on Thursday. The yield on the two-year Treasury rose to 0.77% from 0.75% on Tuesday, while the 10-year Treasury yield increased to 1.79% from 1.76% and the yield on the 30-year Treasury bond gained to 2.61% from 2.58%.
Top shelf municipal bonds finished steady to stronger on Wednesday. The yield on the 10-year benchmark muni general obligation was steady from 1.62% on Tuesday, while the 30-year muni yield fell one basis point to 2.56% from 2.57%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 92.0% on Wednesday compared with 91.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 99.3% versus 98.6%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,255 trades on Wednesday on volume of $13.89 billion.
Primary Market
Citigroup is set to price the MWRA's $514.62 million of general revenue bonds for institutions after holding a one-day retail order period on Wednesday.
The $66.05 million of Series 2016B general revenue bonds were priced for retail as 3s to yield 0.69% in 2018, 0.80% in 2019, 0.93% in 2020; and from 1.39% with a 4% coupon in 2023 to 2.47% with a 5% coupon in 2036; a 2040 term bond was priced as 5s to yield 2.63%. A 2017 maturity was offered as a sealed bid.
The $448.57 million of Series 2016C general revenue refunding green bonds were priced for retail to yield from 1.25% with a 4% coupon in 2022 to 1.77% with a 4% coupon in 2026, as 5s to yield 2.18% in 2031, as 4s to yield 2.77% in 2036 and as 4s to yield 2.93% in a split half of a 2040 maturity. There were no retail order taken in the 2021, 2027-2030, 2032-2035 maturities or in half of the 2040 split maturity. A 2017 maturity was offered as a sealed bid.
The deal is rated Aa1 by Moody's Investors Service and AA-plus by Standard and Poor's and Fitch Ratings. All three rating agencies have a stable outlook on the credit.
Wells Fargo Securities set to price the Kern County, Calif., Golden Empire School Financing Authority’s $150 million of lease revenue refunding notes, which have a mandatory tender in 2017. The notes are rated MIG1 by Moody’s and SP1 by S&P.
RBC Capital Market is expected to price the Tennessee Housing Development Agency’s $125 million of residential finance program bonds, Issue 2016-1A AMT and Issue 2016-1b non-AMT. The deal is rated Aa1 by Moody’s and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.36 billion to $10.00 billion on Thursday. The total is comprised of $4.17 billion of competitive sales and $5.83 billion of negotiated deals.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $2.34 billion, bringing total net assets to $224.32 billion in the week ended April 11, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $2.45 billion to $226.67 billion in the previous week.
The average, seven-day simple yield for the 315 weekly reporting tax-exempt funds was unchanged at 0.04% from the previous week.
The total net assets of the 943 weekly reporting taxable money funds increased $1.11 billion to $2.489 trillion in the week ended April 12, after an outflow of $61.57 billion to $2.487 trillion the week before.
The average, seven-day simple yield for the taxable money funds was unchanged at 0.11%.
Overall, the combined total net assets of the 1,258 weekly reporting money funds decreased $1.23 billion to $2.714 trillion in the period ended April 12, which followed an outflow of $64.03 billion to $2.715 trillion.
