The municipal market was looking ahead to next week's slate of bond issues, led by issuers in Georgia and New York.
Primary Market
Topping the calendar are five separate competitive issues totaling about $1.2 billion from the Dormitory Authority of the State of New York, to be auctioned on Thursday.
The DASNY sales consist of $393.32 million of Series 2015B tax-exempt Group B state personal income tax revenue bonds; $415.87 million of Series 2015B tax-exempt Group C state personal income tax revenue bonds; $241.36 million of Series 2015B tax-exempt Group A state personal income tax revenue bonds; $97.62 million of Series 2015D taxable state personal income tax revenue bonds; and $29.92 million of Series 2015C tax-exempt state personal income tax revenue bonds.
DASNY returns next week after Citi priced its $504 million North Shore Long Island Jewish Health System bonds for the issuer this week.
There are also four separate competitive deals from the state of Georgia totaling around $1 billion set for sale on Tuesday.
The sales consist of $275.32 million of Series 2015A general obligation bonds, Tranche 1; $288.03 million of Series 2015A GOs, Tranche 2; $265.1 million of Series 2015B taxable GOs, Tranche 1; and $279.15 million of Series 2015C GO refunding bonds.
The last time the Peach State sold comparable bonds in the competitive market was on June 17, 2014, when Wells Fargo Securities won $329.25 million of Series 2014A GOs, Tranche 1, with a TIC of 1.63%.
The city of Atlanta is scheduled to competitively offer $252 million of Series 2015 GO public improvement bonds on Wednesday. The bonds are rated Aa2 by Moody's and AA by S&P.
Atlanta last sold comparable bonds competitively on March 5, 2007, when Wachovia Bank bought $8 million of Series 2007A various purpose GOS with a TIC of 3.98%.
In the negotiated sector next week, RBC Capital Markets is slated to price Miami-Dade County, Fla.'s $534.18 million deal consisting of Series 2015A aviation revenue and refunding bonds, subject to the alternative minimum tax, and Series 2015B non-AMT aviation revenue refunding bonds. The deal is rated A by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
RBC is also expected to price the Cleveland Municipal School District, Ohio's $200 million of unlimited tax Series 2015 tax-exempt and Series 2015B taxable general obligation bonds on Wednesday. The deal is backed by the Qualified School Construction Bond Program, Direct Payment, and rated Aa2 by Moody's and AA by S&P and Fitch.
Secondary Market
Treasury prices were lower on Friday after the release of a strong May employment report. The yield on the two-year Treasury note rose to 0.72% from 0.66% on Thursday, while the 10-year yield increased to 2.40% from 2.31% and the 30-year yield rose to 3.09% from 3.03%.
Non-farm payrolls rose 280,000 in May Average hourly earnings were up 0.3% for a 2.3% rise over the year. Hours jumped. However, the unemployment rate rose to 5.5%.
On Thursday, prices of top-rated municipal bonds closed higher, traders said, with yields on some maturities falling by as much as three basis points. In the first three sessions of this week, muni yields rose by as much as 14 basis points.
The yield on the 10-year benchmark muni general obligation declined one basis point to 2.30% from 2.31% on Wednesday, while the yield on the 30-year GO dropped three basis points to 3.27% from 3.30%, according to the final read of Municipal Market Data's triple-A scale.
Among some actively traded issues on Thursday, prices on the Illinois 2003 general obligation funding 5.10s of 2033 were trading stronger, with the yield falling to 5.73% compared to 5.77% on Wednesday, according to Markit.
The 10-year muni to Treasury ratio was calculated on Thursday at 101.9% versus 97.7% on Wednesday, while the 30-year muni to Treasury ratio stood at 108.0% compared to 106.3%, according to MMD.
Tax-Exempt Bond Funds Post Outflows Again
For the fifth straight week, municipal bond funds reported outflows, bringing to eight out of 23 weeks this year the funds have suffered cash withdrawals.
The weekly reporting funds saw $380.735 million of outflows in the week ended June 3, after experiencing outflows of $205.255 million in the previous week, according to the latest Lipper data.
The four-week moving average remained negative at $177.359 million after being in the red at $134.944 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 outflows, losing $73.759 million in the latest week, after seeing outflows of $120.475 million in the previous week.
Intermediate-term funds recorded outflows of $179.954 million after seeing inflows of $20.142 million in the prior week. Exchange traded funds saw outflows of $5.572 million, after experiencing inflows of $42.357 million in the previous week.
However, high-yield muni funds recorded an inflow of $15.878 million in the latest reporting week, after seeing outflows of $117.290 million the previous week.
The Week's Most Actively Quoted Issues
Illinois and California issues were among the most actively quoted in the week ended June 5, according to data released by Markit.
On the bid side, the Illinois taxable 6.63s of 2035 were quoted by 11 unique dealers. On the ask side, the California State Department of Water resources power supply revenue 5s of 2022 were quoted by 14 dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 11 dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues in the week ended June 5 were in New York, Pennsylvania and California names, according to Markit.
In the revenue bond sector, the Montgomery County Industrial Development Authority, Pa., health system 5 1/4s of 2045 were traded 77 times. In the GO bond sector, the New York City 3 1/2s of 2033 were traded 82 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 20 times, according to Markit.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,799 trades on Thursday on volume of $13.336 billion.
The most active bond, based on the number of trades, was the Auburn, Ala. 4s of 2045, which traded 399 times at an average price of 99.235 with an average yield of 4.044%. The bonds were initially priced at 97.108.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $225.2 million to $11.27 billion on Friday. The total is comprised of $5.53 billion competitive sales and $5.74 billion of negotiated deals.
