Top-shelf municipal bonds were little changed at mid-session, according to traders, who are eying next week's holiday-shortened new issue calendar.
Ipreo estimates volume for next week at $5.50 billion, down from $7.05 billion this week, according to revised data from Thomson Reuters. The upcoming calendar is composed of $3.89 billion of negotiated deals and $1.61 billion of competitive sales.
The market is now gearing up for a three-day holiday weekend, with a full trading close on Monday for Labor Day.
Secondary Market
Non-farm payrolls rose 151,000 in August as the unemployment rate remained unchanged at 4.9%. Economists surveyed by IFR Markets had predicted payrolls rising by 180,000 with the unemployment rate falling to 4.8%.
The yield on the 10-year benchmark muni general obligation on Friday was unchanged from 1.44% on Thursday, while the yield on the 30-year rose as much as one basis point from 2.12%, according to a read of Municipal Market Data's triple-A scale.
The yield on the two-year Treasury rose to 0.80% from 0.78% on Thursday, the 10-year Treasury yield gained to 1.61% from 1.57% and the yield on the 30-year Treasury bond increased to 2.28% from 2.23%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 92.0% compared to 90.7% on Wednesday, while the 30-year muni to Treasury ratio stood at 95.1% versus 95.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,579 trades on Thursday on volume of $12.99 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Sept. 2 were from California, Texas and Illinois issuers, according to
In the GO bond sector, the California 5s of 2046 were traded 117 times. In the revenue bond sector, the Univ. of Texas 2.5s of 2036 were traded 39 times. And in the taxable bond sector, the Illinois 6.63s of 2035 were traded 21 times.
Week's Most Actively Quoted Issues
California and Illinois issues were among the most actively quoted names in the week ended Sept. 2, according to Markit.
On the bid side, the Chicago taxable 7.3s of 2039 were quoted by 11 unique dealers. On the ask side, the California HFFA revenue 3s of 2047 were quoted by 24 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 17 unique dealers.
Week's Primary Market
The week saw a lot of high profile names come to market with several big-ticket sales.
JPMorgan Securities priced the state of California's $2.65 billion of various purpose general obligation and GO refunding bonds.
The refunding will save about $628.5 million, or $494.5 million in present value savings, over the remaining life of the bonds, according to State Treasurer John Chiang.
"This is a great deal for our state," Chiang said in a statement. "Every dollar we save in interest charges is available for education, health services, environmental protection and other programs that Californians value."
The deal consisted of $609.18 million of GOs and $2.04 billion of GO refunding bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Bank of America Merrill Lynch priced the Illinois Finance Authority's $500 million of Series 2016 state clean water initiative revolving fund revenue bonds. The deal is rated triple-A by S&P and Fitch.
Barclays Capital priced the Minneapolis-St. Paul Metropolitan Airports Commission's $484.38 million of non-alternative minimum tax senior airport revenue refunding and subordinate airport revenue refunding bonds. The senior bonds are rated AA-minus by S&P and Fitch, while the subordinate bonds are rated A-plus by S&P and Fitch.
JPMorgan Securities priced two issues for the Arizona Transportation Board totaling $314.41 million. The deals consisted of $204.28 million of Series 2016 highway revenue refunding bonds, rated Aa1 by Moody's and triple-A by S&P; and $110.13 million of Series 2016 transportation excise tax revenue refunding bonds for the Maricopa County Regional Area Road Fund, rated Aa1 by Moody's and AA-plus by S&P.
Jefferies priced the Pennsylvania Housing Finance Agency's $254.84 million of Series 2016-121 non-AMT single-family mortgage revenue bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.
Wells Fargo Securities priced the Arizona Board of Regents' $226.13 million of Series 2016B green bond and Series 2016C system revenue bonds. The deal is rated Aa3 by Moody's and AA by S&P.
The Trinity River Authority of Texas sold three separate deals totaling $174.29 million. Citigroup priced the authority's $87.39 million of Series 2016 Regional Wastewater System revenue refunding bonds. The deal is rated triple-A by S&P and AA-plus by Fitch. RBC Capital Markets priced the authority's $67.24 million of Series 2016 revenue improvement and refunding bonds for the Ten Mile Creek System. The deal is rated AA-minus by S&P. Wells Fargo Securities priced the authority's $19.56 million of Series 2016 revenue improvement and refunding bonds for the Red Oak Creek System. The deal is rated AA-minus by S&P.
In the competitive arena, the state of Louisiana sold $161.53 million of Series 2016D GOs. BAML won the deal with a true interest cost of 2.66%. The deal is rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
The Florida Department of Environmental Protection sold $159.77 million of Florida Forever Series 2016A revenue refunding bonds. Wells Fargo Securities won the deal with a true interest cost of 1.59%. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Essex County, N.J., sold $107.02 million of Series 2016 general obligation bonds. Wells Fargo Securities won the deal with a true interest cost of 2.71%. The deal is rated Aa2 by Moody's and AA-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $2.47 billion to $12.44 billion on Friday. The total is comprised of $3.93 billion of competitive sales and $8.52 billion of negotiated deals.
Lipper: Muni Bond Funds See Inflows
For the 48th straight week, municipal bond funds reported inflows, according to Lipper data released on Thursday. The weekly reporters saw $400.291 million of inflows in the week ended Aug. 31, after inflows of $800.918 billion in the previous week, Lipper said.
With the latest week's cash infusion, inflows have been recorded the second-highest number of consecutive weeks, according to Citi Research, surpassing the 47 straight weeks of inflows completed on Oct. 7, 2015. The record for muni fund inflows is for 64 weeks in a row completed on Jan. 7, 2009.
The four-week moving average remained positive at $789.730 billion after being in the green at $878.639 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 $159.510 million in the latest week after inflows of $437.707 million in the previous week. Intermediate-term funds had inflows of $55.211 million after inflows of $199.927 million in the prior week.
National funds had inflows of $342.335 million on top of inflows of $671.285 million in the previous week. High-yield muni funds reported inflows of $30.474 million in the latest reporting week, after inflows of $147.840 million the previous week.
Exchange traded funds saw inflows of $95.576 million, after inflows of $148.664 million in the previous week.
