Municipal bond traders are putting the week's new issue volume into their books as they eye muni yields after the release of the July employment report.
Non-farm payrolls rose 255,000 last month, surpassing economists' forecasts of a 188,000 gain. The payroll gain in June was upwardly revised to 292,000 from the originally reported 287,000 increase. The jobless rate in July remained at 4.9%.
U.S. Treasuries moved lower on the news as stock prices gained.
The yield on the two-year Treasury rose to 0.69% from 0.64% on Thursday, the 10-year Treasury yield gained to 1.54% from 1.50% and the yield on the 30-year Treasury bond increased to 2.27% from 2.25%.
U.S. equities rose in early trading. The Dow Jones Industrial Average rose 0.6%, the S&P 500 was up 0.5% and the Nasdaq gained 0.6%.
"July's job gains at 255,000 give the market a reason to cap the work week on a cheerier note. The average work week went up and average hourly earnings went up by 0.7 cents for a 2.6% year-over-year gain," S&P Global Ratings Economists Beth Ann Bovino and Satyam Panday, said in a statement. "A solid August jobs report should allow Federal Reserve officials to breathe a little easier when they meet in September and keep them on track for an interest rate hike likely after the U.S. elections in December."
On Thursday, top-shelf municipal bonds finished stronger. The yield on the 10-year benchmark muni general obligation fell four basis points to 1.41% from 1.45% on Wednesday, while the yield on the 30-year muni dropped two basis points to 2.15% from 2.17%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 93.9% on Thursday compared to 94.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 95.3% versus 94.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,259 trades on Thursday on volume of $15.10 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Aug. 5 were from New York, Texas and Wisconsin issuers, according to
In the GO bond sector, the NYC 4s of 2035 were traded 71 times. In the revenue bond sector, the University of Texas 2s of 2041 were traded 57 times. And in the taxable bond sector, the Wisconsin 3.294s of 2037 were traded 50 times.
Week's Most Actively Quoted Issues
Illinois and Texas issues were among the most actively quoted names in the week ended Aug. 5, according to Markit.
On the bid side, the Illinois taxable 6.725s of 2035 were quoted by 13 unique dealers. On the ask side, the El Paso Water & Sewer revenue 5s of 2034 were quoted by 14 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 11 unique dealers.
Primary Market
The market saw the busiest new issue week in a while, with many large deals filling the calendar.
Goldman, Sachs priced New York City's $800 million of general obligation bonds for institutions. The deal is rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.
Goldman also remarketed the city's $55.46 million of Fiscal 2017 Series 1 GOs. The deal was priced as 5s to yield 0.90% in 2020, 1.05% in 2021 and 1.36% in 2023.
Additionally, the Big Apple competitively sold two separate issues of taxable GOs totalling $250 million. JPMorgan Securities won the $172.95 million of Fiscal 2017 Subseries A-2 taxables with a true interest cost of 2.20%. Bank of America Merrill Lynch won the $77.06 million of Fiscal 2017 Subseries A-3 taxables with a TIC of 2.66%. The GOs were priced at par to yield 2.52% in 2027 and 2.69% in 2028.
BAML priced two issues for Miami-Dade County, Fla., totaling about $745 million, consisting of $316.73 million of Series 2016A tax-exempt aviation revenue refunding bonds, not subject to the alternative minimum tax and $428.65 million of Series 2016B taxable aviation revenue refunding bonds. The deals are rated A by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
Goldman, Sachs priced the Board of Regents of the University of Texas system's $376.03 million of Series 2016F revenue financing system bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
Ramirez & Co. priced San Antonio, Texas' $338.88 million of Series 2016 general improvement and refunding bonds, combination tax and revenue certificates of obligation, and tax notes. The deal is rated triple-A by Moody's, S&P and Fitch.
Ramirez also priced the Austin Independent School District, Texas' $326.76 million of Series 2016A, B and C unlimited tax refunding bonds. The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody's and Fitch.
Citigroup priced the San Diego Regional Transportation Commission's $325 million of Series 2016A limited tax sales tax revenue bonds. The deal is rated triple-A by S&P and Fitch.
RBC Capital Markets priced Hamilton County, Ohio's $324.04 million of Series 2016A sales tax refunding bonds. The deal is rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Siebert Brandford Shank priced the Pennsylvania Turnpike Commission's $313.99 million of Series 2016A oil franchise tax senior revenue refunding bonds and Series 2016B oil franchise tax subordinated revenue refunding bonds. The deal is rated Aa3 by Moody's and AA by Fitch.
JPMorgan priced the Board of Regents of the University of Texas System's $272.35 million of Series 2016B permanent university fund bonds. The deal is rated triple-A by Moody's and Fitch.
Citigroup priced Guam's $237.92 million of Series 2016A limited obligation Section 30 bonds. The deal is rated BBB-plus by S&P.
Siebert priced the Oakland Unified School District, Calif.'s $220.64 million of Series 2016A Election of 2006 general obligation bonds and Series 2016 GO refunding bonds. The deal is rated Aa3 by Moody's, AA-minus by S&P and triple-A by Fitch.
BAML Priced the Maricopa Community College District, Ariz.'s $191.13 million of Series 2016 GO refunding bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
Raymond James priced the Humble Independent School District, Texas' $185.63 million of Series 2016A unlimited tax school building bonds and Series 2016B unlimited tax refunding bonds. The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody's and S&P. JPMorgan priced the Humble ISD's $86.12 million of Series 2016C unlimited tax refunding bonds, non-PSF. The deal is rated Aa1 by Moody's and AA-minus by S&P.
Citi priced the Omaha Public Power District, Neb.'s $182.7 million of Series 2016A electric system revenue bonds. The deal is rated Aa2 by Moody's and AA by S&P.
JPMorgan priced the North Carolina Medical Care Commission's $125.14 million of Series 2016D healthcare facilities revenue refunding bonds for the Duke University Health System. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
BAML priced Lincoln, Neb.'s $114.34 million of Series 2016 revenue refunding bonds. The deal is rated AA by S&P and Fitch.
Citi priced the Massachusetts Development Finance Agency's $149.63 million of Series 2016 revenue bonds for the Berklee College of Music. The deal is rated A2 by Moody's and A by S&P.
JPMorgan priced the Massachusetts Water Resources Authority's $104.55 million of Series 2016DF general revenue refunding green bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Wells Fargo Securities priced the Alaska Housing Finance Corp.'s $100 million of Series 2016A general mortgage revenue bonds. The deal is rated AA-plus by S&P and Fitch.
In the competitive arena, the state of Minnesota sold four separate issues of GOs totaling almost $788 million. Barclays Capital won the $301.2 million of Series 2016D state various purpose refunding bonds with a TIC of 1.57%. Wells Fargo Securities won the $264.25 million of Series 2016A state various purpose bonds with a TIC of 2.29%. Morgan Stanley won the $215 million of Series 2016B state trunk highway bonds with a TIC of 2.13%. Raymond James won the $7.5 million of Series 2016C taxable state various purpose bonds with a TIC of 1.38%. All of the sales are rated Aa1 by Moody's, AA-plus by S&P and triple-A by Fitch.
Connecticut sold two separate issues totaling $500 million. Morgan Stanley won the $250 million of Series 2016D tax-exempt general obligation bonds with a true interest cost of 2.53%. Morgan Stanley also won the $250 million of Series 2016A taxable GOs with a TIC of 2.12%. Both deals are rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Clark County, Nev., competitively sold $269.47 million of Series 2016 limited tax GO water reclamation refunding bonds, additionally secured by pledged revenues. BAML won the bonds with a TIC of 2.64%. The deal is rated Aa1 by Moody's and triple-A by S&P.
The Miami-Dade County School District, Fla., competitively sold $200 million of Series 2016 GO school bonds. BAML won the bonds with a TIC of 3.40%. The deal is rated Aa3 by Moody's and A-plus by S&P.
Plano Independent School District in Texas sold $257.21 million of Series 2016 unlimited tax school building bonds. Citigroup won the bonds with a TIC of 2.22%. The deal is backed by the PSF and rated triple-A by Moody's and S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $980.8 million to $11.39 billion on Friday. The total is comprised of $3.13 billion of competitive sales and $8.26 billion of negotiated deals.
Lipper: Muni Bond Funds See Inflows
For the 44th straight week, municipal bond funds reported inflows, according to Lipper data released on Thursday.
The weekly reporters saw $783.930 million of inflows in the week ended Aug. 3, after inflows of $782.940 million in the previous week, Lipper said.
The four-week moving average remained positive at $950.662 billion after being in the green at $939.178 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 inflows, gaining $476.187 million in the latest week after inflows of $658.429 million in the previous week. Intermediate-term funds had inflows of $122.531 million after inflows of $23.786 million in the prior week.
National funds had inflows of $666.956 million on top of inflows of $634.324 million in the previous week. High-yield muni funds reported inflows of $267.286 million in the latest reporting week, after inflows of $206.715 million the previous week.
Exchange traded funds saw inflows of $76.659 million, after inflows of $166.130 million in the previous week.
