Top quality municipal bond prices were higher on Friday at midday, according to traders, as yields on some maturities were from two to four basis points lower.
The market will see an estimated $9.4 billion of new issuance next week, which is made up of $7 billion of negotiated deals and $2.4 billion of competitive sales.
Secondary Market
On Friday morning, the yield on the 10-year benchmark muni general obligation was as much as two basis point lower from 2.19% on Thursday, while the 30-year was anywhere from two to four basis points lower from 3.19%, according to a morning read of Municipal Market Data's triple-A scale.
Treasuries were higher on Friday morning, the two-year Treasury yield was down to 0.85% from 0.87% on Thursday, while the 10-year Treasury yield was lower at 2.28% from 2.32% and the 30-year yield dipped to 3.06% from 3.09% on Thursday.
The 10-year muni to Treasury ratio was calculated on Thursday 94.7% versus 94.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 103.3% compared to 103.2%, according to MMD.
The Week's Primary Market
In a somewhat strange week with little volume and a mid-week pause, there is still a lot to talk about.
On Tuesday, what was supposed to be the biggest deal of the week – a $1.75 billion revenue bond offering from All Aboard Florida – got delayed.
AAF's planned 235-mile intercity express train from Miami to Orlando received a private-activity bond allocation from the U.S. Department of Transportation. The project continues to fight state and federal legal challenges brought by Martin and Indian River counties where the train will pass through but not stop. The deal was not rated and the plan was to sell to qualified institutional buyers and accredited investors.
Market sources indicated this deal is considered "day-to-day," so market participants will have to keep a watch out.
JPMorgan priced the Central Texas Regional Mobility's $371.07 million of senior lien revenue and refunding put bonds. The deal is rated Baa2 by Moody's and BBB-plus by S&P.
BAML priced the Miami-Dade County school board's $343.92 million of certificates of participation. The deal is rated A1 by Moody's and A-minus by S&P.
Bank of America Merrill Lynch won the Washington, Md., suburban sanitation district's $150.67 million of consolidated public improvement refunding bonds, with a true interest cost of 2.15%. The deal is rated triple-A by Moody's, S&P and Fitch Ratings.
The New Jersey Environmental Infrastructure Trust sold three separate issues totaling roughly $140.69 million on Tuesday. Wells Fargo won the largest of the three - $117.475 million of refunding bonds, Series 2015B-R2, which are subject to alternative minimum tax, with a TIC of 1.99%.
PNC Capital Markets won the $13.905 million deal with a TIC of 2.30% and Citi won the $9.31 million deal with a TIC of 2.79%. All three deals were rated triple-A by Moody's, S&P and Fitch.
JPMorgan priced Kershaw County, S.C., public schools foundation's $102.235 million of installment purchase refunding revenue bonds. The deal is rated A1 by Moody's and A-minus by S&P and the 2026-3031 maturities are insured by Build America Mutual.
On Thursday, Citi priced Springfield, Ill.'s $509.38 million of senior-lien electric revenue bonds, which will restructure debt for operating relief and generate traditional present value savings. The deal is rated A3 by Moody's Investors Service and A by Standard and Poor's. The 2030 to 2034 and 2040 maturities are insured by Assured Guaranty Municipal Corp.
The California Public Works Board sold $223.15 million of lease revenue bonds for the Department of Corrections and Rehabilitation and California State Prison, Corcoran, and various buildings. Morgan Stanley won the bidding with a true interest cost of 3.16%. The jail bonds are rated A1 by Moody's, A-plus by S&P and A by Fitch Ratings.
The Virginia College Building sold two separate issues totaling roughly $207.33 million. The larger issue, $154.085 million of educational facilities revenue refunding bonds, Series 2015B, was won by Wells Fargo Securities with a TIC of 2.65%.
The $53.245 million of educational facilities revenue bonds, series 2015A, was also won by Wells Fargo, with a TIC of 3.24%. Both deals are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
The Week's Most Actively Traded Issues
In the revenue bond sector, the Central Texas Regional Mobility Authority 5s of 2045 were traded 54 times. In the GO sector, the California 5s of 2045 were traded 26 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 16 times, Markit said.
The Week's Most Actively Quoted Issues
Puerto Rico and California were some of the most actively quoted names in the week ended Nov. 13, according to data released by Markit.
On the bid side, the Commonwealth of Puerto Rico GO 5.125s of 2037 were quoted by 11 dealers. On the ask side, the California GO 5s of 2045 were quoted by 15 dealers. And among two-sided quotes, sales tax asset receivable corp. New York revenue 5s of 2029 were quoted by 21 dealers.
Municipal Bond Funds See Inflows for 6th Week in a Row
Municipal bond funds reported inflows for the sixth week in a row, according to Lipper data released on Thursday.
Weekly reporting funds experienced $329.498 million of inflows in the week ended Nov. 11, after inflows of $62.996 million in the previous week, Lipper said.
The latest inflow brings to 25 out of 46 weeks this year that cash has flowed in to the funds. Flows for the year to date are in the green, totaling about $3.329 billion.
The four-week moving average remained positive at $245.562 million after being in the green at $293.390 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 inflows, gaining $165.507 million in the latest week, on top of inflows of $39.828 million in the previous week. Intermediate-term funds had inflows of $110.967 million after inflows of $30.657 million in the prior week.
National funds saw inflows of $303.467 million after inflows of $39.185 million in the prior week. High-yield muni funds reported inflows of $52.103 million in the latest reporting week, after an inflow of $52.653 million the previous week.
Exchange traded funds saw inflows of $100.362 million, after inflows of $9.996 million in the previous week.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,531 trades on Thursday on volume of $8.297 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.890 billion to $11.46 billion on Friday. The total is comprised of $3.22 billion competitive sales and $8.24 billion of negotiated deals.
