Top quality municipal bonds were mixed at md-session, traders said, as the market prepares for a few big deals as activity winds down ahead of next week’s more robust slate.
The yield on the 10-year benchmark muni general obligation rose as much as one basis point from 1.92% on Wednesday, while the 30-year GO yield was unchanged from 2.80%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Thursday. The yield on the two-year Treasury dipped to 1.43% from 1.44% on Wednesday, the 10-year Treasury yield slipped to 2.26% from 2.27% and the yield on the 30-year Treasury bond decreased to 2.80% from 2.82%.
On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 84.4% compared with 85.4% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 99.3% versus 99.4%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,733 trades on Wednesday on volume of $11.78 billion.
Tax-exempt money market funds see inflows
Tax-exempt money market funds experienced inflows of $236.6 million, raising total net assets to $128.23 billion in the week ended Sept. 18, according to The Money Fund Report, a service of iMoneyNet.com.
This followed an outflow of $692.4 million to $127.99 billion in the previous week.
The average, seven-day simple yield for the 226 weekly reporting tax-exempt funds moved up to 0.37% from 0.34% the previous week.
The total net assets of the 836 weekly reporting taxable money funds decreased $25.08 billion to $2.557 trillion in the week ended Sept. 19, after an inflow of $24.36 billion to $2.582 trillion the week before.
The average, seven-day simple yield for the taxable money funds rose to 0.68% from 0.67% the prior week.
Overall, the combined total net assets of the 1,062 weekly reporting money funds decreased $24.85 billion to $2.685 trillion in the week ended Sept. 19, after inflows of $23.7 million to $2.710 trillion in the prior week.
On Thursday in the competitive arena, the Cherry Creek School District No. 5, Colo., sold $178.34 million of unlimited tax general obligation bonds.
Hutchinson Shockey won the $100 million of Series 2017C GOs with a true interest cost of 3.21%. Pricing information was not immediately available.
Raymond James & Associates won the $78.34 million of Series 2017B GOs with a TIC of 1.897%.
The deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings.
In the negotiated sector on Thursday, Morgan Stanley received the written award on Atlantic City, N.J.’s $68.33 million of Series 2017B tax appeal refunding bonds issued as qualified under the “provisions of the Municipal Qualified Bond Act, P.L. 1976, C.28, as amended.”
The deal was backed by Assured Guaranty Municipal and rated A2 by Moody’s and AA by S&P and carries MQBA underlying ratings of Baa1 from Moody’s and BBB-plus from S&P.
The issue was priced to yield from 1.19% with a 2% coupon in 2018 to 2.66% with a 5% coupon in 2027. A 2032 maturity was priced as 5s to yield 3.05%, a 2037 maturity was priced as 5s to yield 3.29% and a 2042 maturity was priced as 4s to yield 3.80%.
D.A. Davidson & Co. is expected to price the California Statewide Commission’s Series 2017A refunding revenue bonds for the California Baptist University.
Stifel is expected to price Wayne Township School Building Corp., Ind.’s $100 million of ad valorem property tax first mortgage refunding and improvement bonds. The deal is rated AA-plus by S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $735.0 million to $9.15 billion on Thursday. The total is comprised of $5.52 billion of competitive sales and $3.62 billion of negotiated deals.