Top-shelf municipal bonds were unchanged at midday, according to traders, who are looking ahead to next week’s smaller-than-average new issue calendar.
Ipreo estimates total bond volume for next week at $4.97 billion, down from a revised total of $8.68 billion this week, according to data from Thomson Reuters. Next week’s slate is composed of $2.29 billion of negotiated deals and $2.68 billion of competitive sales.
The yield on the 10-year benchmark muni general obligation was unchanged from 2.00% on Thursday, while the 30-year GO yield was steady from 2.85%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were little changed on Friday. The yield on the two-year Treasury was flat from 1.45%, the 10-year Treasury yield dipped to 2.30% from 2.31% and the yield on the 30-year Treasury bond decreased to 2.86% from 2.87%.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 86.7% compared with 85.9% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 99.3% versus 99.3%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 41,186 trades on Friday on volume of $12.69 billion.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Sept. 29 were from Oregon, Colorado and Illinois issuers, according to Markit.
In the GO bond sector, the Oregon 5s of 2018 were traded 41 times. In the revenue bond sector, the city and county of Denver, Colo., 5s of 2032 were traded 76 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 23 times.
Week's actively quoted issues
Puerto Rico, Maryland and Illinois names were among the most actively quoted bonds in the week ended Sept. 29, according to Markit.
On the bid side, the Puerto Rico Commonwealth GO 5s of 2041 were quoted by 90 unique dealers. On the ask side, the Prince George’s County, Md., revenue 3.25s of 2047 were quoted by 304 dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 28 unique dealers.
Week’s primary market
Morgan Stanley priced the Texas Water Development Board’s $1.05 billion of State Water Implementation Revenue Fund for Texas bonds. The deal is rated triple-A from S&P Global Ratings and Fitch Ratings.
Raymond James priced the New York City Municipal Water Finance Authority’s $384.14 million of water and sewer system second general resolution revenue bonds. The deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Bank of America Merrill Lynch priced New Jersey Turnpike Authority’s $579.375 million of revenue SIFMA LIBOR indexed bonds. The deals are rated A2 by Moody’s, A-plus by S&P and A by Fitch.
Bank of America Merrill Lynch priced Oregon’s $577.795 million tax anticipation notes. The TANs are rated MIG 1 by Moody’s, SP-1-plus by S&P and F1-plus by Fitch.
Citi priced the City and County of Denver, Colo.’s $250.575 million special facilities airport revenue refunding bonds for the United Airlines project. The deal is rated BB-minus by S&P.
BAML priced the New Jersey Economic Development Authority’s $350 million of school facilities construction bonds.
Steven M. Petrecca, associate deputy state treasurer, said the transaction ended up 10 times oversubscribed with $32 million in net savings compared to spreads from New Jersey’s last two appropriation-backed bond deals. “It absolutely exceeded expectations,” said Petrecca.
The deal is rated Baa1 by Moody’s, BBB-plus by S&P and A-minus by Fitch.
BAML priced Wayne County Airport Authority’s $279.515 million of revenue bonds. The bond are rated A2 by Moody’s and A by S&P and Fitch.
RBC Capital Markets priced the Pennsylvania Economic Development Authority’s $436.75 million of revenue bonds for the University of Pittsburgh Medical Center. The deal is rated A1 by Moody’s, A-plus by S&P and AA-minus by Fitch.
Morgan Stanley priced the Industrial Development Authority of the County of Maricopa, Ariz.’s $362.07 million of revenue bonds for Banner Health. The deal is rated AA-minus by S&P and Fitch.
BAML priced the South Dakota Health and Educational Facilities Authority’s $222.874 million of revenue refunding bonds for Avera Health. The deal is rated A1 by Moody’s and AA-minus by S&P.
Citi priced the Edmond Public Works Authority, Okla.’s $167.025 million of sales tax and utility system revenue bonds. The deal is rated AA-minus by S&P.
On the competitive side, Minnesota sold a total of $846.795 million of general obligation trunk highway and refunding taxable bonds in five separate sales.
BAML won the $312.305 million of GO various purpose refunding bonds with a true interest cost of 2.07%. Citi won the $312.055 million of GO various purpose bonds with a TIC of 2.74%. Wells Fargo won the $114 million of GO state trunk highway bonds with a TIC of 2.57%. BAML also won the $81.435 million of GO trunk highway refunding bonds with a TIC of 1.92%. Wells Fargo won the $27 million of GO taxable various purpose bonds with a TIC of 2.02%.
“This bond sale provides the capital necessary to fund critical projects throughout our great state. These investments will strengthen communities across Minnesota, ensuring Minnesotans can continue enjoying the high quality of life they know and deserve,” said Myron Frans, the state’s Management and Budget Commissioner. “This bond sale also reflects the confidence investors have in our state’s fiscal position.”
The deals are rated AAA by Fitch.
Washington state sold a total of $528.735 million in three separate sales.
Citi won the $435.025 million of general obligation various purpose motor vehicle fuel tax bonds with a TIC of 3.36%. Wells Fargo won the $36.65 million of taxable GO refunding various purpose motor vehicle fuel tax bonds with a TIC of 1.75%. Morgan Stanley won the $57.06 million with a TIC of 1.22%. The deals are rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
The Massachusetts Bay Transportation Authority sold a total of $501.185 million in three separate sales.
JPMorgan won the $271.095 million of subordinate sales tax sustainability bonds with a TIC of 1.37%; Wells won the $130.92 million with a TIC of 3.61%; and Citi won the $99.170 million with a TIC of 3.61%.
“We could not be more pleased by the outcome of this issuance,” said MBTA General Manager Luis Manuel Ramírez. “Not only did the market acknowledge our creditworthiness and commitment to fiscal sustainability, investors rewarded us for our positive environmental and social impact. I would like to commend MBTA Treasurer Paul Brandley and Chief Administrator Michael Abramo for their hard work in bringing this issuance to fruition and the beginnings of its success.”
The deals are rated Aa3 by Moody’s and AA by S&P.
The California State Public Works Board sold $202.325 million of various lease revenue bonds. Wells Fargo won the bonds with a TIC of 2.49%. The deal is rated A1 by Moody’s and A-plus by S&P and Fitch Ratings.
Topping next week’s new issue slate will be the Dormitory Authority of the State of New York, which will be coming to market with over $1 billion of deals in separate competitive and negotiated offerings.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $582.8 million to $8.85 billion on Friday. The total is comprised of $3.65 billion of competitive sales and $5.20 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds once again put cash into the funds, according to Lipper data released late Thursday.
The weekly reporters drew $378.211 million of inflows in the week of Sept. 27, after inflows of $573.978 million in the previous week.
Exchange traded funds reported inflows of $85.005 million, after inflows of $26.746 million in the previous week. Ex-EFTs, muni funds saw $293.206 million of inflows, after inflows of $547.231 million in the previous week.
The four-week moving average was positive at $360.985 million, after being in the green at $352.562 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 $302.608 million in the latest week after inflows of $225.329 million in the previous week. Intermediate-term funds had inflows of $107.568 million after inflows of $113.402 million in the prior week.
National funds had inflows of $381.156 million after inflows of $561.769 million in the previous week.
High-yield muni funds reported inflows of $124.678 million in the latest week, after inflows of $133.982 million the previous week.