Municipal bond buyers next week will welcome one of the biggest new issue slates the market has seen this year, somewhat alleviating the supply drought caused by last year’s late rush to issuance in December.
Ipreo estimates next week’s volume at $7.5 billion, which is comprised of $5.1 billion of negotiated deals and $2.4 billion of competitive sales. Average weekly volume so far this year has been around $4 billion; in 2017, average weekly volume was over $6 billion.
Bond Buyer 30-day visible supply at $8.24B
The Bond Buyer's 30-day visible supply calendar decreased $1.55 billion to $8.24 billion on Friday. The total is comprised of $2.75 billion of competitive sales and $5.49 billion of negotiated deals.
With little support from the Treasury market on Friday morning, the mood in Muniland was quiet on a dreary Friday and yields pretty much unchanged on the day, just before noon, according to one New York muni underwriter.
“The MMD is saying unchanged on the day which is pretty close, maybe a touch weaker,” he said.
As he waited for allotments on one of the bigger deals of the week — the New York State Thruway Authority offering — he summed up the deal by saying it saw “tons of retail and was very well received across the board up and down the curve.”
“Retail was in very big,” he added, noting that by the end of the retail order period parts of the deal were oversubscribed and underwriters were able to reprice at lower yields.
He attributed the strong demand to the Thruway’s solid name recognition and the market tone at pricing. “It’s a good name and we had a good market yesterday,” he said.
He expected the rest of the day to be just as quiet.
“I think people are just looking out the window and wondering about their commute later,” as the New York City area battled a Nor’easter, he said.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended March 2 were from New York, Pennsylvania and Washington, D.C. issuers, according to Markit.
In the GO bond sector, the New York City 4s of 2036 traded 44 times. In the revenue bond sector, the Pennsylvania Commonwealth Financing Authority tobacco 4s of 2039 traded 58 times. And in the taxable bond sector, the D.C. Convention Center and Sports Authority 4.312s of 2040 traded 31 times.
Week's actively quoted issues
Pennsylvania, D.C. and California names were among the most actively quoted bonds in the week ended March 2, according to Markit.
On the bid side, the Pennsylvania Commonwealth Financing Authority tobacco revenue 4s of 2039 were quoted by 38 unique dealers. On the ask side, the Washington Metropolitan Airports Authority revenue 5s of 2024 were quoted by 105 dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 20 unique dealers.
Previous session's activity
The Municipal Securities Rulemaking Board reported 40,939 trades on Thursday on volume of $14.13 billion.
California, New York and Texas were the states with the most trades, with the Golden State taking 16.782% of the market, the Empire State taking 11.437% and the Lone Star State taking 9.317%.
Lipper: Muni bond funds saw outflows
Investors in municipal bond funds once 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 $590.943 million of outflows in the week of Feb. 28, after inflows of $347.403 million in the previous week.
Exchange traded funds reported inflows of $1.276 million, after outflows of $18.979 million in the previous week. Ex-ETFs, muni funds saw $592.219 million of outflows, after inflows of $366.381 million in the previous week.
The four-week moving average was negative at $3.010 million, after being in the green at $203.707 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 $492.084 million in the latest week after outflows of $56.672 million in the previous week. Intermediate-term funds had inflows of $29.617 million after inflows of $491.709 million in the prior week.
National funds had outflows of $373.190 million after inflows of $354.086 million in the previous week. High-yield muni funds reported outflows of $221.998 million in the latest week, after outflows of $5.074 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.