The municipal market is winding up the week’s primary dealings with a negotiated sale from the Dormitory Authority of the State of New York as traders eye Puerto Rico bonds.
Secondary market
U.S. Treasuries were unchanged on Thursday. The yield on the two-year Treasury was flat from 1.48%, the 10-year Treasury yield was unchanged from 2.33% and yield on the 30-year Treasury bond was steady from 2.88%.
Top-quality municipal bonds finished unchanged on Wednesday. The yield on the 10-year benchmark muni general obligation was steady from 2.01% on Tuesday, while the 30-year GO yield was flat from 2.82%, according the final read of Municipal Market Data's triple-A scale.
On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 86.2% compared with 86.3% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 98.0% versus 98.2%, according to MMD.
Puerto Rico bonds slip
Some Puerto Rico bonds were trading lower in early activity on Thursday.
The Commonwealth Highway and Transportation Authority’s Series 2007CC revenue refunding 5.25s of 2032 were trading at a low price of 105.12 cents on the dollar in four trades totaling $120,000 compared to a low price of 108.551 in six trades totaling $180,000 on Tuesday, according to the Municipal Securities Rulemaking Board’s EMMA website.
The Commonwealth’s Series 2007A public improvement 5.5s of 2019 were trading at a low price of 102.469 cents on the dollar in three trades totaling $75,000 compared to a low price of 101.758 in four trades totaling $50,000 on Tuesday.
On Wednesday, municipal volume was brisk at $13.4 billion, with Puerto Rico trading a significant portion at about 9%, behind only New York and California names, according to Janney’s Thursday market comment.
“Following President Trump’s Tuesday comments about wiping out PR debt, prices of most PR bonds plunged,” Janney said. “PR GO 8% of 2035, which traded as high as 53 last week, fell to 32, recovered to 39 mid-day and closed at 38.20 while COFINA seniors (5% of 2046) printed block trades around 45 (vs low 50s last week) and a large piece of subs (5 12% of 2040) traded at 11.”
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 42,466 trades on Wednesday on volume of $13.36 billion.
Tax-exempt money market funds see outflows
Tax-exempt money market funds experienced outflows of $40.3 million, lowering total net assets to $127.86 billion in the week ended Oct. 2, according to The Money Fund Report, a service of iMoneyNet.com.
This followed an outflow of $327.1 million to $127.90 billion in the previous week.
The average, seven-day simple yield for the 224 weekly reporting tax-exempt funds grew to 0.44% from 0.40% the previous week.
The total net assets of the 830 weekly reporting taxable money funds decreased $2.49 billion to $2.585 trillion in the week ended Oct. 3, after an inflow of $30.27 billion to $2.587 trillion the week before.
The average, seven-day simple yield for the taxable money funds remained at 0.68% from the prior week.
Overall, the combined total net assets of the 1,054 weekly reporting money funds decreased $2.53 billion to $2.712 trillion in the week ended Oct. 3, after inflows of $29.94 million to $2.715 trillion in the prior week.
Primary market
RBC Capital Markets is set to price DASNY’s $301.48 million of school districts and financing program revenue bonds in five series on Thursday.
The Series 2017 F, G, H, I and J bonds carry various ratings ranging from Aa2 and Aa3 from Moody’s Investors Service to A-plus from S&P Global Ratings and AA-minus from Fitch Ratings.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $284.8 million to $6.70 billion on Thursday. The total is comprised of $2.37 billion of competitive sales and $4.33 billion of negotiated deals.
