Municipal bond traders are looking ahead to the weekend — and waiting for next week’s lighter new issue slate.
Treasuries were mixed on Friday. The yield on the two-year Treasury dipped to 1.32% from 1.33% on Thursday, the 10-year Treasury yield was unchanged from 2.21% and the yield on the 30-year Treasury bond increased to 2.81% from 2.79%.
Top-rated municipal bonds ended stronger on Thursday. The yield on the 10-year benchmark muni general obligation fell two basis points to 1.88% from 1.90% on Wednesday, while the 30-year GO yield dropped one basis point to 2.73% from 2.74%, according to the final read of Municipal Market Data's triple-A scale.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 85.1%, compared with 84.9% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 98.1% versus 97.3%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 37,278 trades on Thursday on volume of $10.68 billion.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Aug. 11 were from Massachusetts and Ohio issuers, according to Markit.
In the GO bond sector, the Massachusetts 2s of 2018 were traded 85 times. In the revenue bond sector, the Ohio 3.25s of 2035 were traded 62 times. And in the taxable bond sector, the Ohio 3.7s of 2043 were traded 39 times.
Week's actively quoted issues
Nevada, California and Indiana names were among the most actively quoted bonds in the week ended Aug. 11, according to Markit.
On the bid side, the North Las Vegas, Nev., taxable 6.572s of 2040 were quoted by 86 unique dealers. On the ask side, the Bay Area Toll Authority, Calif., revenue 3.25s of 2036 were quoted by 232 unique dealers. And among two-sided quotes, the Indiana Finance Authority revenue 5s of 2028 were quoted by five unique dealers.
Week’s primary market
Action was concentrated in the competitive arena this week.
The New York City Transitional Finance Authority sold $1.5 billion of fiscal 2018 future tax secured subordinate bonds in six separate offerings.
Bank of America Merrill Lynch won the $411.95 million of Subseries A-3 tax-exempts with a true interest cost of 3.74%. RBC Capital Markets won the $406.82 million of Subseries A-2 tax-exempts with a TIC of 3.63%. Citigroup won the $162.13 million of Series 1 bonds with a TIC of 2.11%.
JPMorgan Securities won the $225.91 million of Subseries A-5 taxables with A TIC of 3.44%. Additionally, JPMorgan won the $181.24 million of Subseries A-1 tax-exempts with a TIC of 1.29%. JPMorgan also won the $124.095 million of Subseries A-4 taxables with a TIC of 2.99%.
The deals are rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings and Fitch Ratings.
The Louisville and Jefferson County Metropolitan Sewer District, Ky., sold $210.73 of sewer and drainage system revenue and revenue refunding bonds in two separate offerings. BAML won the $175 million of Series 2017A revenue bonds with a TIC of 3.36%. TD Securities won the $35.73 million of revenue refunding bonds with a TIC of 1.68%. The deals are rated Aa3 by Moody’s and AA by S&P.
The Virginia Public School Authority sold $103.44 million of Series 2017B school financing refunding bonds under the 1997 resolution. Morgan Stanley won the bonds with a TIC of 2.38%. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
The Florida State Board of Education competitively sold $144.23 million of Series 2017A full faith and credit public education capital outlay refunding bonds. JPMorgan Securities won the bonds with a TIC of 2.72%. The deal is rated Aa1 by Moody’s and AAA by S&P and Fitch.
And there was no slacking off in the negotiated sector either.
JPMorgan Securities priced the Ohio Higher Educational Facilities Commission’s approximately $1 billion deal, consisting of $820.2 million of Series 2017A tax-exempts and $164.87 million of Series 2017B taxable hospital refunding revenue bonds for the Cleveland Clinic Health System Obligated Group. The deal is rated Aa2 by Moody’s and AA by S&P.
Goldman Sachs priced Miami-Dade County, Fla.’s $694.79 million of aviation revenue and revenue refunding bonds, consisting of $380.22 million of tax-exempt Series 2017B bonds subject to the alternative minimum tax and $314.57 million of Series 2017D taxable bonds. The deal is rated A by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
Morgan Stanley priced Philadelphia’s $273.97 million of gas works revenue bonds, 15th series issued under the 1998 general ordinance. The deal is rated A3 by Moody’s, A by S&P and BB-plus by Fitch.
Citigroup priced the $202.35 million of the St. Paul Housing and Redevelopment Authority, Minn.’s $202.35 million of Series 2017A healthcare system revenue bonds for Fairview Health Services. The deal is rated A2 by Moody’s and A-plus by S&P.
Siebert Cisneros Shank priced San Antonio, Texas’ $196.02 million of new Series 2017 electric and gas systems revenue refunding bonds. The deal is rated Aa1 by Moody’s, AA by S&P and AA-plus by Fitch.
Bank of America Merrill Lynch priced the Tyler Independent School District, Texas’ $175.77 million of Series 2017 unlimited tax school building bonds. The deal, which is backed by the Permanent School Fund guarantee program, is rated AAA by S&P and Fitch.
Barclays Capital Markets priced the California Statewide Communities Development Authority’s $148.64 million of Series 2017 student housing revenue bonds for the University of California’s Irvine East campus apartments, Phase IV-A. The deal is rated Baa1 by Moody’s.
Citi priced the Palm Beach County Solid Waste Authority, Fla.’s $107.88 million of Series 2017 taxable refunding revenue bonds. The deal is rated Aa2 by Moody’s and AA-plus by S&P.
Piper Jaffray priced Issaquah School District No. 411, Wash.’s $104.33 million of Series 2017 unlimited tax general obligation bonds. The deal is insured by the Washington School Bond Guarantee Program and rated Aaa by Moody’s and AA-plus by S&P.
Raymond James & Associates priced the Hays Consolidated Independent School District, Texas’ unlimited tax school building bonds. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody’s and Fitch.
Bank of America Merrill Lynch priced the Ohio Water Development Authority’s $250 million of Series 2017B water pollution control loan fund revenue notes. The deal is rated triple-A by Moody’s and S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $677.1 million to $9.15 billion on Friday. The total is comprised of $4.43 billion of competitive sales and $4.71 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds put cash into the funds in the latest week, according to Lipper data.
The weekly reporters saw $631.216 million of inflows in the week of Aug. 9, after inflows of $143.847 million in the previous week.
The four-week moving average was positive at $349.152 million, after being in the green at $148.209 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 had inflows of $406.426 million in the latest week after inflows of $118.150 million in the previous week. Intermediate-term funds had inflows of $137.827 million after inflows of $19.414 million in the prior week.
National funds had inflows of $615.734 million after inflows of $203.351 million in the previous week. High-yield muni funds reported inflows of $148.092 million in the latest reporting week, after inflows of $73.549 million the previous week.
Exchange traded funds saw inflows of $160.401 million, after inflows of $54.212 million in the previous week.