Muni deals continue to see deluge of demand

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The municipal market pick up right where it left off on Wednesday — with unwavering demand from investors.

"The muni market saw a ton of paper hit and didn't blink, it probably could have handled more," said one New York trader. "I know buyers would have liked to see more but the slate next week doesn't look too shabby."

JPM received the written award on Cities of Dallas and Fort Worth’s (A1/A+/A+/AA) $1.16 billion of joint revenue refunding bonds for Dallas Fort Worth International Airport.

The New York Metropolitan Transportation Authority sold a total of $434.385 million of transportation revenue climate bond certified green bonds in two separate competitive sales on Thursday. The bonds are rated A1 by Moody’s Investors Service, AA by S&P Global Ratings and AA-minus by Fitch Ratings

JPMorgan won $218.19 million with a true interest cost of 3.3169%. Bank of America Securities won the other sale of $204.24 million with a TIC of 3.3438%. The bonds are insured by Assured Guaranty and AA by S&P and AA-plus by Kroll Bond Rating Agency. This deal replaces a Jan. MTA green bond deal as the largest insured Green Bond deal to date.

RBC Capital Markets priced The Equitable School Revolving Fund’s ( /A/ ) $111.725 million of national charter school revolving loan fund revenue bonds with more than $1 billion in orders. The long bonds saw 13-17 basis point bumps in a repricing. The deal consisted of national charter school revolving loan fund revenue bonds for the Arizona Industrial Development Authority and the California Infrastructure and Economic Development Bank. The 30-year with a 4% coupon on the Arizona tranche yielded 2.89%, or 88 basis points over MMD. The California tranche 30-year with a 5% coupon yielded 2.40%, plus 39 to MMD.

"Nearly 50 investors put in orders with long bonds 18 times oversubscribed — this enabled us to hit record low rates for schools, tremendous credit and scale for investors, and huge leveraged social impact for the philanthropist," said Equitable Facilities Fund CEO, Anand Kesavan. "The breadth and depth of investor interest is both exciting and humbling. Tax-exempt investors spoke loud and clear that they believe in the Equitable School Revolving Fund."

Thursday’s bond sales

DFW airport written award

New York MTA bidding group 1 pricing

New York MTA bidding group 2 pricing

Equitable School Revolving Fund pricing

Muni money market funds see small inflow
Tax-exempt municipal money market fund assets inched up by $330.7 million, bringing total net assets to $136.42 billion in the week ended Aug. 5, according to the Money Fund Report, a publication of Informa Financial Intelligence.
The average seven-day simple yield for the 191 tax-free and municipal money-market funds was unchanged from 1.01% in the previous week.

Taxable money-fund assets gained $57.21 billion in the week ended Aug. 6, bringing total net assets to $3.165 trillion, the eighth consecutive week that the taxable total has reached or exceeded $3 trillion. It is also the highest total since the week ended June 16, 2009, when taxable assets totaled $3.169 trillion.

The average, seven-day simple yield for the 809 taxable reporting funds declined to 1.86% from 1.94% the prior week.

Overall, the combined total net assets of the 1,000 reporting money funds rose $57.54 billion to $3.301 trillion in the week ended Aug. 6. This marks the highest total since the week ended Nov. 3, 2009, when assets totaled $3.312 trillion.

Secondary market
Munis were stronger still in late trading on the MBIS benchmark scale, with yields down one basis point in 10-year and by two basis points in the 30-year maturities. High-grades were mixed, with MBIS’ AAA scale showing yields up by nearly two basis points in the 10-year and down by three basis points in the 30-year maturities.
Munis were weaker on Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on the 10-year was two basis points higher, while the 30-year was also up two basis points to 1.33% and 2.01%, respectively.

The 10-year muni-to-Treasury ratio was calculated at 77.8% while the 30-year muni-to-Treasury ratio stood at 90.1%, according to MMD.

Treasury yields were mixed stocks staged a comeback closing in the green by at least 1%. The Treasury three-month was yielding 2.020%, the two-year was yielding 1.617%, the five-year was yielding 1.534%, the 10-year was at 1.720% and the 30-year was yielding 2.240%.

Previous session's activity
The Municipal Securities Rulemaking Board reported 34,846 trades Wednesday on volume of $15.216 billion. The 30-day average trade summary showed on a par amount basis of $10.68 million that customers bought $5.53 million, customers sold $3.14 million and interdealer trades totaled $2.01 million.

California, Texas and New York were most traded, with the Golden State taking 14.562% of the market, the Lone Star State taking 13.294% and the Empire State taking 11.943%.

The most actively traded security was the State of Ohio Water Development Authority 5s of 2029, which traded 11 times on volume of $51.5 million.

BB indexes drastically drop
In the week ended Aug. 8, the weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices fell seven basis points to 3.60% from 3.67% the previous week.

The Bond Buyer's 20-bond GO Index of 20-year general obligation yields sunk 20 basis point to 3.22% from 3.42% the week before. It is at its lowest level since Oct. 6, 2016, when it was at 3.20%.

The 11-bond GO Index of higher-grade 11-year GOs plummeted 20 basis point to 2.76% from 2.96% the previous week. It is at its lowest level since Sept. 29, 2016, when it was at 2.64%.

The Bond Buyer's Revenue Bond Index shrunk 20 basis points to 3.70% from 3.90% the week before. It is at its lowest level since Sept. 7, 2017, when it was at 3.70%.

The yield on the U.S. Treasury's 10-year declined to 1.72% from 1.90% and the 30-year Treasurys descended to 2.24% from 2.44%.

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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Primary bond market Secondary bond market State of California State of Texas State of New York Metropolitan Transportation Authority Dallas Fort Worth International Airport Board
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