Top-shelf municipal bonds were weaker at midday, according to traders, who are looking ahead to the new issue holiday week calendar. Markets will be closed on Monday in observance of Columbus Day.

Ipreo estimates total bond volume for next week at $7.2 billion, up from a revised total of $4.42 billion this week, according to updated data from Thomson Reuters. The upcoming slate is composed of $5.1 billion of negotiated deals and $2.1 billion of competitive sales.

Secondary market
The yield on the 10-year benchmark muni general obligation rose one to three basis points from 2.01% on Thursday, while the 30-year GO yield gained as much as two basis points from 2.83%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were weaker on Friday after the release of a weaker-than-expected employment report for for September. Non-farm payrolls fell 33,000 last month, the first drop since 2010 while the jobless rate declined to 4.2%, a 16-year-low.

The yield on the two-year Treasury rose to 1.52% from 1.50% on Thursday, the 10-year Treasury yield gained to 2.36% from 2.35% and yield on the 30-year Treasury bond increased to 2.91% from 2.90%.

On Thursday, the 10-year muni-to-Treasury ratio was calculated at 85.6% compared with 86.2% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 97.9% versus 98.0%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 38,686 trades on Thursday on volume of $10.88 billion.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Oct. 6 were from Puerto Rico, Arizona and California issuers, according to Markit.

In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 88 times. In the revenue bond sector, the Maricopa County Industrial Development Authority, Ariz., 4s of 2041 were traded 40 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 13 times.

Week's actively quoted issues
Puerto Rico, Maryland and California names were among the most actively quoted bonds in the week ended Oct. 6, according to Markit.

On the bid side, the Puerto Rico Commonwealth GO 5s of 2041 were quoted by 114 unique dealers. On the ask side, the Prince George’s County, Md., revenue 3.25s of 2047 were quoted by 319 dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 27 unique dealers.

Week’s primary market
The Dormitory of the State of New York competitively sold $1.7 billion of bonds in a handful of offerings.

DASNY sold its general purpose state personal income tax revenue bonds in five groups:

  • Goldman Sachs won the $569.65 million of Series 2017B bidding group 1 bonds with a TIC of 1.76%;
  • Bank of America Merrill Lynch won the $517.21 million of Series 2017B bidding group 2 bonds with a true interest cost of 3.19%;
  • Morgan Stanley won the $533.54 million of Series 2017B bidding group 3 bonds with a TIC of 3.79%;
  • JPMorgan Securities won the $34.71 million of Series 2017D taxable bonds with a TIC of 1.84%; and
  • Roosevelt & Cross won the $21.94 million of Series 2017C tax-exempt bonds with a TIC of 3.35%.

The PITs are rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings.

Also in the competitive arena, the New York’s Triborough Bridge and Tunnel Authority sold $400 million of Series 2017A general revenue bond anticipation notes. The issue was won by six groups including Citigroup, Morgan Stanley, Goldman Sachs, JPMorgan Securities, Barclays Capital and RBC Capital Markets:

  • Citi won $150 million, taking $100 million with a bid of 2% and a $384,000 premium, an effective rate of 0.925430% and taking $50 million with a bid of 2% and a $193,000 premium, an effective rate of 0.919840%;
  • Morgan Stanley won $150 million taking $100 million with a bid of 2% and a $385,000 premium, an effective rate of 0.922630% and taking $50 million with a bid of 2% and a $193,500 premium, an effective rate of 0.917050%;
  • Goldman Sachs won $25 million with a bid of 2% and a $96,750 premium, an effective rate of 0.917050%;
  • JPMorgan won $25 million with a bid of 2% and a $96,500 premium, an effective rate of 0.919840%;
  • Barclays won $25 million with a bid of 2% and a $96,250 premium, an effective rate of 0.922630%; and
  • RBC won $25 million with a bid of 2% and a $96,250 premium, an effective rate of 0.922630%.

The TBTA’s BANs are rated MIG1 by Moody’s, SP1-plus by S&P, F1-plus by Fitch Ratings and K1-plus by Kroll Bond Rating Agency.

Columbus, Ohio, sold $314.12 million of various purpose bonds in three separate sales. Morgan Stanley won the $285.82 million of Series 2017A unlimited tax bonds with a TIC of 2.64%. PNC Capital Markets won the $19.51 million of Series 2017C taxable limited tax bonds with a TIC of 2.55% while it also won the $8.8 million of Series 2017B limited tax bonds with a TIC of 2.14%. The deals are rated triple-A by Moody’s, S&P and Fitch Ratings.

King County, Wash., competitively sold $148.01 million of Series 2017 limited tax general obligation refunding bonds which are payable from sewer revenues. BAML won the bonds with a true interest cost of 2.55%. The deal is rated triple-A by Moody’s and S&P.

In the short-term competitive arena, Milwaukee, Wis., sold $180 million of Series 2017 school revenue anticipation notes. BAML won the notes with a bid of 5% and a premium of $6,650,999.99, an effective rate of 1.024264%. The notes are rated SP1-plus by S&P and F1-plus by Fitch.

In the negotiated sector, Goldman Sachs priced the San Diego Unified School District’s $220 million of Series 2017 dedicated unlimited ad valorem property tax general obligation bonds. The deal is rated Aa3/MIG1 by Moody’s and AAA/F1-plus by Fitch.

BAML priced the Maine Municipal Bond Bank’s $179.31 million of Series 2017C bonds and Series 2017D refunding bonds. The deal is rated Aa2 by Moody’s and AA-plus by S&P.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $1.88 billion to $8.57 billion on Friday. The total is comprised of $2.87 billion of competitive sales and $5.70 billion of negotiated deals.

Lipper: Muni bond funds see outflows
Investors in municipal bond funds pulled cash out of the funds in the latest week, according to Lipper data released late Thursday.

The weekly reporters saw $140.336 million of outflows in the week of Oct. 4, after inflows of $378.211 million in the previous week.

Exchange traded funds reported inflows of $72.007 million, after inflows of $85.005 million in the previous week. Ex-EFTs, muni funds saw $212.343 million of outflows, after inflows of $293.206 million in the previous week.

The four-week moving average was positive at $263.309 million, after being in the green at $360.985 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 $136.354 million in the latest week after inflows of $302.608 million in the previous week. Intermediate-term funds had inflows of $117.108 million after inflows of $107.568 million in the prior week.

National funds had inflows of $58.823 million after inflows of $381.156 million in the previous week.

High-yield muni funds reported outflows of $13.655 million in the latest week, after inflows of $124.678 million the previous week.

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