Muni supply surge slows

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With most of the big bond deals out of the way, the municipal market began to quiet down on Thursday.

Primary market
In the competitive arena, the Clark County School District, Nev., sold $200 million of Series 2018B limited tax general obligation bonds.

Citigroup won the bonds with a true interest cost of 3.8365%.

Proceeds will be used to acquire, construct, improve, and equip the district’s school facilities. The financial advisor was Zions Public Finance and the bond counsel was Sherman & Howard.

The deal is rated A1 by Moody’s Investors Service and A-plus by S&P Global Ratings except for the 2037 and 2038 maturities, which are insured by Assured Guaranty Municipal and rated AA by S&P.

RBC Capital Markets priced the Arlington Higher Education Finance Corp.’s $102.71 million of Series 2018 education revenue bonds for Kipp Texas, Inc.

The deal, backed by the Permanent School Fund Guarantee Program, is rated AAA by S&P.

Raymond James & Associates priced Mississippi’s $152.98 million of taxable Series 2018 GOs.

The deal is rated Aa2 by Moody’s and AA by S&P and Fitch Ratings.

Thursday’s bond sales

Click here for the Clark County sale

Click here for the Arlington deal

Click here for the state deal

Bond Buyer 30-day visible supply at $5.5B
The Bond Buyer's 30-day visible supply calendar decreased $6.17 billion to $5.50 billion for Thursday. The total is comprised of $3.12 billion of competitive sales and $2.37 billion of negotiated deals.

ICI: Long-term muni funds saw $1.65B outflow
Long-term tax-exempt municipal bond funds saw an outflow of $1.653 billion in the week ended Oct. 10, the Investment Company Institute reported.

This followed an outflow of $2 million in the week ended Oct. 3 an outflow of $385 million, and inflows of $116 million. $30 million, $4 million, $273 million, $531 million, $662 million, $723 million, and $163 million in the nine prior weeks.

Taxable bond funds saw an estimated outflow of $5.484 billion in the latest reporting week, after seeing an inflow of $6.499 billion in the previous week.

ICI said the total estimated outflows to long-term mutual funds and exchange-traded funds were $11.353 billion after outflows of $72 million in the prior week.
Secondary market
Municipal bonds were mixed on Thursday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields fell less than one basis point in the six- to 11-year and 19- to 29-year maturities, rose less than a basis point in the one- to three-year and 12- to 18-year maturities and remained unchanged in four- and five-year and 30-year maturities.

High-grade munis were also mixed, with yields calculated on MBIS' AAA scale falling less than one basis point in the six- to 12-year and 19- to 29-year maturities, rising less than a basis point in the one- to five-year and 13- to 17-year maturities and remaining unchanged in 18-year and 30-year maturities.

Municipals were weaker on Municipal Market Data’s AAA benchmark scale, which showed the yield on both the 10-year muni general obligation and the yield on 30-year muni maturity rising by as much as two basis points.

Treasury bonds were stronger as stocks traded lower.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 85.5% while the 30-year muni-to-Treasury ratio stood at 101.2%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Previous session's activity
The Municipal Securities Rulemaking Board reported 44,970 trades on Wednesday on volume of $17.75 billion.

New York, California and Texas were the municipalities with the most trades, with the Empire State taking 17.364% of the market, the Golden State taking 15.011% and the Lone Star State taking 9.693%.

Muni money market funds see inflow
Tax-free municipal money market fund assets increased $788.3 million, raising their total net assets to $133.83 billion in the week ended Oct. 15, according to the Money Fund Report, a service of

The average seven-day simple yield for the 197 tax-free and municipal money-market funds rose to 1.10% from 1.08% last week.

Taxable money-fund assets decreased $21.63 billion in the week ended Oct. 16, raising total net assets to $2.696 trillion.

The average, seven-day simple yield for the 830 taxable reporting funds increased to 1.77% from 1.75% last week.

Overall, the combined total net assets of the 1,029 reporting money funds fell $20.84 billion to $2.830 trillion in the week ended Oct. 16.
Treasury announces auction details
The Treasury Department announced these auctions:

  • $31 billion of seven-year notes selling on Oct. 25;
  • $39 billion of five-year notes selling on Oct. 24;
  • $38 billion of two-year notes selling on Oct. 23;
  • $19 billion of two-year floating rate notes selling on Oct. 24;
  • $39 billion of 182-day bills selling on Oct. 22; and
  • $45 billion of 91-day bills selling on Oct. 22.

Gary Siegel contributed to this report.

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 Ziad Saba at 212-803-6079 for more information.

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