Municipal bond traders were taking a rare breather on Friday after seeing a rather heavy calendar of sales during this holiday-shortened week. The market will now be looking ahead to next week's slate, which is expected to remain hefty.
Secondary Market
U.S. Treasuries were weaker on Friday. The yield on the two-year Treasury rose to 0.85% from 0.83% on Thursday, the 10-year Treasury yield gained to 1.78% from 1.74% and the yield on the 30-year Treasury bond increased to 2.53% from 2.47%.
Top-quality municipal bonds finished unchanged on Thursday. The yield on the 10-year benchmark muni general obligation was flat from 1.70% on Wednesday, while the yield on the 30-year was unchanged from 2.53%, according to the final read of Municipal Market Data's triple-A scale.
On Thursday, the 10-year muni to Treasury ratio was calculated at 97.8% compared to 95.7% on Wednesday, while the 30-year muni to Treasury ratio stood at 102.2% versus 100.9%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,091 trades on Thursday on volume of $12.33 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Oct. 14 were from Puerto Rico, Massachusetts and Illinois, according to
In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 16 times. In the revenue bond sector, the Massachusetts Development Finance Agency 4s of 2036 were traded 38 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 18 times.
Week's Most Actively Quoted Issues
Illinois and Florida issues were among the most actively quoted bonds in the week ended Oct. 14, according to Markit.
On the bid side, the Illinois taxable 7.35s of 2035 were quoted by 46 unique dealers. On the ask side, the Tampa, Fla., revenue 3s of 2046 were quoted by 423 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 24 unique dealers.
Week's Primary Market
The week saw a large number of sizable issues come to market.
Bank of America Merrill Lynch priced the state of Illinois' $1.32 billion of Series of October 2016 general obligation refunding bonds. The deal is rated Baa2 by Moody's Investors Service, BBB by S&P Global Ratings and BBB-plus by Fitch Ratings, with the exception of the 2030 through 2032 maturities, which are insured by Assured Guaranty Municipal.
Citigroup priced the Great Lakes Water Authority, Mich.'s $1.33 billion deal, consisting of $909.83 million of Series 2016 water supply system senior lien and second lien revenue senior lien and second lien revenue refunding bonds and $417.19 million of sewage disposal system revenue refunding senior and second lien bonds.
Moody's rates the senior liens A3 and the second liens Baa1; S&P rates the senior liens A-minus and the second liens BBB-plus; and Fitch rates the senior liens A and the second liens A-minus.
Raymond James & Associates priced the Cypress-Fairbanks Independent School District, Texas' $446.24 million of unlimited tax school building and refunding bonds. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
Morgan Stanley priced the California Department of Water Resources' $420.46 million of Series AW water system revenue bonds for the Central Valley water project. The deal is rated Aa1 by Moody's and triple-A by S&P.
Goldman Sachs priced the Long Island Power Authority, N.Y.'s $408.11 million of Series 2016B electric system general revenue bonds. The deal is rated A3 by Moody's and A-minus by S&P and Fitch.
Loop Capital priced the Dormitory Authority of the State of New York's $144.89 million of Series 2016A revenue refunding bonds for the New York State Department of Health. The bonds are rated AA by S&P and Fitch.
JPMorgan Securities priced the Maricopa County Industrial Development Authority, Ariz.'s $804.15 million of Series 2016A revenue bonds for Banner Health. The deal is rated AA-minus by S&P and Fitch.
Bank of America Merrill Lynch priced the Charlotte-Mecklenburg Hospital Authority, N.C.'s $391.01 million of Series 2016A healthcare revenue refunding bonds for the Carolinas Healthcare System. The deal is rated Aa3 by Moody's and AA-minus by S&P.
Morgan Stanley priced Indianapolis' $223.53 million of Series 2016B water system first lien refunding revenue bonds. The deal is rated AA-minus by S&P and A by Fitch.
In the competitive arena, the Campbell, Kenton and Boone Counties Sanitation District No. 1, Ky., sold $124.99 million of Series 2016 sanitation district revenue refunding bonds. BAML won the issue with a true interest cost of 2.83%. The deal is rated Aa3 by Moody's and AA by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.196 billion to $19.47 billion on Friday. The total is comprised of $6.13 billion of competitive sales and $13.33 billion of negotiated deals.
Lipper Reports Inflows
Municipal bond funds reported inflows for the 54th week in a row, according to Lipper data released on Thursday.
The weekly reporters saw $147.312 million of inflows in the week ended Oct. 12, after inflows of $324.600 million in the previous week, Lipper said.
The four-week moving average remained positive at $413.441 million after being in the green at $497.993 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 experienced outflows, losing $55.575 million in the latest week after inflows of $134.483 million in the previous week. Intermediate-term funds had inflows of $130.884 million after inflows of $110.063 million in the prior week.
National funds had inflows of $105.906 million on top of inflows of $263.911 million in the previous week. High-yield muni funds reported outflows of $247.536 million in the latest reporting week, after outflows of $33.243 million the previous week.
Exchange traded funds saw inflows of $138.071 million, after inflows of $92.295 million in the previous week.
