The municipal bond market will see a shortage of new supply kicking off the new year, after experiencing a record-breaking month in December where almost $63 billion of bonds sold.

Ipreo estimates weekly supply at $757.4 million, composed of $713.0 million of negotiated deals and $44.4 million of competitive sales. In the first week of 2017, $625.2 million of bonds came to market.

Leading off the negotiated calendar is the New Jersey Economic Development Authority’s $381.195 million of state lease revenue bonds for state government buildings. RBC Capital Markets is expected to price the bonds on Thursday.

The offering is comprised of $197.275 million bonds for the Health Department and Taxation Division office project; $19.225 million taxable bonds for the Health Department office project; and $164.695 million of bonds for the Juvenile Justice Commission Facilities project.

Proceeds of the sale will be used to fund construction of Health Department and Taxation Division office buildings in Trenton and to finance building juvenile justice commission facilities in Ewing and Winslow townships.

The deal is rated Baa1 by Moody’s Investors Service, BBB-plus by S&P Global Ratings and A-minus by Fitch Ratings.

RBC is also expected to price the Socorro Independent School District, Texas’ $173.54 million of Series 2018 unlimited tax school building bonds on Thursday.

The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and Fitch.

Stifel is set to price the Anaheim Successor Agency to the Redevelopment Agency, Calif.’s $110 million of Series 2018A tax allocation refunding bonds on Thursday.

The deal is rated AA-minus by S&P.

There are no competitive sales over $50 million slated for the new week.

Bond Buyer 30-day visible supply at $3.86B
The Bond Buyer's 30-day visible supply calendar increased $712.7 million to $3.86 billion on Friday. The total is comprised of $1.29 billion of competitive sales and $2.57 billion of negotiated deals.

Secondary market
The MBIS municipal non-callable 5% GO benchmark scale was stronger in late trading on Friday.

The 10-year muni benchmark yield fell to 2.278% from the final read of 2.284% on Thursday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield decreased to 2.738% from 2.753%.

The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.

Top-rated municipal bonds finished stronger on Friday. The yield on the 10-year benchmark muni general obligation fell one basis point to 1.98% from 1.99% on Thursday, while the 30-year GO yield dipped one basis point to 2.54% from 2.55% according to the final read of MMD’s triple-A scale.

U.S. Treasuries were stronger on Friday. The yield on the two-year Treasury fell to 1.89% from 1.91% on Thursday, the 10-year Treasury yield declined to 2.41% from 2.43% and the yield on the 30-year Treasury decreased to 2.74% from 2.76%.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 34,474 trades on Thursday on volume of $15.91 billion.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Dec. 29 were from Puerto Rico, Illinois and Connecticut issuers, according to Markit.

In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 42 times. In the revenue bond sector, the Railsplitter Tobacco Settlement Authority, Ill., 5s of 2027 were traded 42 times. And in the taxable bond sector, the Connecticut Student Loan Foundation zeroes of 2034 were traded 17 times.

Week's actively quoted issues
Puerto Rico, New Jersey and Illinois names were among the most actively quoted bonds in the week ended Dec. 29, according to Markit.

On the bid side, Puerto Rico Commonwealth GO 5s of 2041 were quoted by 79 unique dealers. On the ask side, New Jersey Turnpike Authority 3.25s of 2038 were quoted by 190 dealers. And among two-sided quotes, Illinois taxable 5.1s of 2033 were quoted by 18 unique dealers.

Lipper: Muni bond funds saw outflows
Investors in municipal bond funds again reversed course and pulled cash out of the funds in the latest week, according to Lipper data released on Thursday.

The weekly reporters saw $180.177 million of outflows in the week of Dec. 27, after inflows of $250.663 million in the previous week.

Exchange traded funds reported outflows of $15.570 million, after inflows of $212.354 million in the previous week. Ex-ETFs, muni funds saw $164.606 million of outflows, after inflows of $38.309 million in the previous week.

The four-week moving average was negative at $129.949 million, after being in the red at $59.796 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 $122.015 million in the latest week after inflows of $399.232 million in the previous week. Intermediate-term funds had inflows of $43.649 million after inflows of $128.869 million in the prior week.

National funds had inflows of $37.812 million after inflows of $323.331 million in the previous week.

High-yield muni funds reported inflows of $225.414 million in the latest week, after inflows of $153.089 million the previous week.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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