Municipal bond volume drops to under $6 billion next week and buyers’ voracious hunger for new issues will have to be satisfied with a smaller supply slate.
Ipreo forecasts weekly bond volume will decline to $5.9 billion from a revised total of $10.3 billion in the prior week, according to updated data from Thomson Reuters. The calendar is composed of $4 billion of negotiated deals and $1.9 billion of competitive sales.
Primary market
JPMorgan Securities is set to price the Tarrant County Cultural Educational Facilities Finance Corp., Texas’ $447.32 million of Series 2018AB revenue and refunding bonds for Christus Health on Tuesday.
Also on Tuesday JPMorgan is set to price for Christus Health a $339.02 million taxable corporate CUSIP deal.
The deals are rated A1 by Moody’s Investors Service and A-plus by S&P Global Ratings.
Citigroup is expected to price the Hillsborough County Aviation Authority, Fla.’s $402 million of revenue bonds for the Tampa International Airport.
The deal consists of Series 2018E bonds subject to the alternative minimum tax and Series 2018F non-AMT bonds, rated Aa3 by Moody’s, AA-minus by S&P and Fitch Ratings and AA by Kroll Bond Rating Agency; and Series 2018 subordinate bonds, rated A1 by Moody’s, A-plus by S&P and Fitch and AA-minus by Kroll.
In August, Kroll upgraded the authority’s revenue bonds to AA from AA-minus and subordinated revenue bonds to AA-minus from A-plus and assigned a stable outlook to both.
In the competitive arena on Tuesday, Clark County, Nev., is selling $450 million of general obligation bonds in two sales consisting of $300 million of Series 2018B limited tax transportation improvement bonds and $150 million of Series 2018 limited tax park improvement bonds additionally secured by pledged revenues.
The financial advisors are Hobbs, Ong & Associates and PFM Financial Advisors; the bond counsel is Sherman & Howard.
Proceeds of the 2018B bonds will be used to finance a portion of the costs of certain improvements to transportation facilities within the Strip Resort Corridor; proceeds of the 2018 bonds will be used to finance certain park projects.
The deals are rated Aa1 by Moody’s and AA-plus by S&P.
In the short-term competitive sector, the Chicago Board of Education is selling $200 million of Series 2018A tax anticipation notes on Thursday.
Financial advisors are PFM Financial Advisors and Columbia Capital Management; the bond counsel are Ice Miller and Pugh Jones Johnson.
Bond Buyer 30-day visible supply at $7.34B
The Bond Buyer's 30-day visible supply calendar increased $1.84 billion to $7.34 billion for Friday. The total is comprised of $2.71 billion of competitive sales and $4.63 billion of negotiated deals.
Secondary market
Municipal bonds were mixed on Friday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields fell less than one basis point in the 15- to 17-year and 27- to 30-year maturities, rose as much as a basis point in the one- to 13-year and 18- to 26-year maturities and remained unchanged in 14-year maturity.
High-grade munis were mostly stronger, with yields calculated on MBIS' AAA scale falling less than one basis point in the one- to five-year and 10- to 30-year maturities and rising less than a basis point in the six- to nine-year maturities.
Municipals were steady 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 remaining unchanged.
Treasury bonds were weaker as stocks traded higher.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 86.1% while the 30-year muni-to-Treasury ratio stood at 101.3%, 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 45,902 trades on Thursday on volume of $17.25 billion.
New York, California and Texas were the municipalities with the most trades, with the Empire State taking 17.406% of the market, the Golden State taking 13.409% and the Lone Star State taking 9.455%.
Week's actively traded issues
Some of the most actively traded munis by type in the week ended Oct. 19 were from New York, Utah and Puerto Rico issuers, according to
In the GO bond sector, the New York City zeros of 2042 traded 24 times. In the revenue bond sector, the Salt Lake City Airport 5s of 2048 traded 64 times. And in the taxable bond sector, the Puerto Rico Government Development Bank 5s of 2023 traded 11 times.
Week's actively quoted issues
Puerto Rico, New York and California names were among the most actively quoted bonds in the week ended Oct. 19, according to Markit.
On the bid side, the Puerto Rico Commonwealth GO 5s of 2041 were quoted by 35 unique dealers. On the ask side, the New York City Municipal Water Finance Authority 4s of 2047 were quoted by 169 dealers. And among two-sided quotes, the Los Angeles Unified School District 5.75s of 2034 were quoted by 22 dealers.
Lipper: Muni bond funds saw outflows
Investors in municipal bond funds remained cautious and once again pulled cash out of the funds during the latest reporting week, according to Lipper data released on Thursday.
The weekly reporters saw $642.032 million of outflows in the week ended Oct. 17 after outflows of $847.858 million in the previous week.
Exchange traded funds reported inflows of $155.595 million, after outflows of $211.389 million in the previous week. Ex-ETFs, muni funds saw $797.628 million of outflows, after outflows of $636.468 million in the previous week.
The four-week moving average remained negative at -$479.578 million, after being in the red at $283.857 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 outflows of $659.499 million in the latest week after outflows of $933.968 million in the previous week. Intermediate-term funds had outflows of $80.325 million after outflows of $72.567 million in the prior week.
National funds had outflows of $487.127 million after outflows of $704.697 million in the previous week. High-yield muni funds reported outflows of $604.919 million in the latest week, after outflows of $500.423 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.
