Prices of top-rated municipal bonds were mostly higher at mid-session, traders said, with yields on most maturities steady to as much as three basis points lower.
In the primary, Citi priced the District of Columbia's $534.28 million sale while Bank of America Merrill Lynch priced the Lower Colorado River Authority, Texas' $245.66 million deal.
Primary Market
Citi priced the D.C. general obligation bond deal in two series. The $500 million of Series 2015A new money GOs were priced as 5s to yield from 1.17% in 2018 to 3.53% in 2038; a 2040 term bond was priced as 4s to yield 3.93%. The $34.28 million Series 2015B GO refunding bonds were priced as 5s to yield 2.61% in 2025, 2.78% in 2026 and 2.92% in 2027.
"The new money proceeds will support our capital program, which the main use for the program is for schools, transportation and other infrastructure projects," Jeffrey Barnette, Treasurer for the District of Columbia, told The Bond Buyer last week. "The refunding portions of the deal — the 2005 bonds have reached their 10-year call date so we will be refunding those for economic purposes and we are projecting present value savings of $9 million."
The issue is rated Aa1 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings and carries a stable outlook from all three rating agencies.
Since 1996, Washington, D.C., has issued about $9 billion of GOs, with the largest issuance occurring in 2007 and 2008 when it offered $1.3 billion and $1 billion, respectively; D.C. sold no bonds in 2006 or 2009.
Bank of America Merrill Lynch priced the Lower Colorado River Authority, Texas' $245.66 million of Series 2015 transmission contract refunding revenue bonds for the LCRA Transmission Services Corp.
The bonds were priced to yield from 0.84% with a 4% coupon in 2017 to 4.11% with a 4% coupon in 2035. A split 2040 maturity term bond was priced as 4s to yield 4.25% and as 5s to yield 4.03% and a split 2045 maturity term bond was priced as 4 1/4s to yield 4.35% and as 5s to yield 4.10%. The 2016 maturity was offered as a sealed bid.
The issue is rated A by S&P and A-plus by Fitch except for the 2033, 2034 and 2035 maturities and the 2040 4s, which are insured by AGM, and rated A2 by Moody's and AA by S&P.
RBC Capital Markets received the official award on Chicago's $111.72 million of Series 2002 sales tax revenue refunding bonds. The final pricing on the bonds had them yielding from 1.525% with a 2% coupon in 2016 to 4.62% with a 5% coupon in 2034.
Ahead of the sale, Chicago had highlighted the strong coverage and bondholder protections on this sales tax credit. Still, the ratings on the credit diverged, with the issue being rated triple-A by S&P, BBB-plus by Fitch and AA-plus by Kroll Bond Rating Agency. Moody's was not asked to rate the deal.
Secondary Market
The yield on the 10-year benchmark muni general obligation declined as much as one basis point from 2.31% on Wednesday, while the yield on the 30-year GO dropped one to three basis points from 3.30%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Thursday as the yield on the two-year Treasury note was unchanged at 0.67% from Wednesday, while the 10-year yield declined to 2.33% from 2.36% and the 30-year yield dropped to 3.06% from 3.11%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 97.7% versus 100.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.3% compared to 107.3%, according to MMD.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $1.09 billion, bringing total net assets to $244.09 billion in the period ended June 1, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $179.4 million to $245.18 billion in the previous week.
The average, seven-day simple yield for the 395 weekly reporting tax-exempt funds remained at 0.01% for a 109th straight week.
The total net assets of the 993 weekly reporting taxable money funds rose $6.28 billion to $2.401 trillion in the period ended June 2, after experiencing an inflow of $1.87 billion to $2.395 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 20th consecutive week.
Overall, the combined total net assets of the 1,388 weekly reporting money funds increased $5.19 billion to $2.645 trillion in the period ended May 26, which followed an inflow of $1.69 billion to $2.640 trillion in the prior period.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 49,983 trades on Wednesday on volume of $14.256 billion.
The most active bond, based on the number of trades, was the Eastern Illinois University's taxable Build America Bonds with a direct subsidy to issuer's certificates of participation Series 2009A 6.35s of 2036, which traded 497 times at an average price of 87.573 with an average yield of 7.541%. The bonds were initially priced at par to yield 6.35%.
Bond Buyer Visible Supply The Bond Buyer's 30-day visible supply calendar decreased $2.36 billion to $11.49 billion on Thursday. The total is comprised of $5.17 billion competitive sales and $6.23 billion of negotiated deals.
