Municipal supply jumps to $7.2B

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Municipal bond buyers will feel like Goldilocks next week as they see a new issue calendar that is not too small and not too big but comes out just right.

Ipreo forecasts weekly bond volume will surge to $7.2 billion from a revised total of $3.8 billion this week, according to updated data from Thomson Reuters. The calendar is composed of $5.6 billion of negotiated deals and $1.6 billion of competitive sales.

Primary market
Topping off the negotiated slate is a $550 million deal coming out of Hawaii.

Bank of America Merrill Lynch is set to price the Aloha State’s general obligation bonds on Wednesday after a one-day retail order period. The bonds are being sold in three tranches: a $454.2 million tax-exempt series, a $50 million taxable series, and a $45.7 million taxable series.

Ahead of the deal, Moody's Investors Service affirmed its Aa1 rating, S&P Global Ratings affirmed its AA-plus rating and Fitch Ratings affirmed its AA rating.

Also on tap is the Los Angeles County Metropolitan Transportation Authority’s $545 million deal.

Siebert Cisneros Shank is expected to price the Proposition C sales tax senior revenue bonds on Wednesday after a one-day retail order period. The issue is composed of Series 2019A green bonds and Series 2019B revenue bonds.

The deal is rated Aa2 by Moody’s, AAA by S&P and AA-plus by Fitch.

On the competitive side, Washington state is selling $640.925 million of general obligation bonds in two offerings.

The deals consist of $468.695 million of Series 2019C various purpose GOs and $172.23 million of Series 2019D motor vehicle fuel tax GOs. Proceeds of the Series 2019C&D bonds will be used to reimburse expenditures for various state capital projects and programs.

The financial advisors are Montague DeRose & Associates and Piper Jaffray. The bond counsel is Foster Pepper.

The deals are rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

Bond Buyer 30-day visible supply at $6.97B
The Bond Buyer's 30-day visible supply calendar increased $185.1 million to $6.97 billion for Thursday. The total is comprised of $2.44 billion of competitive sales and $4.53 billion of negotiated deals.

Lipper: Muni bond funds see inflows
Investors in municipal bond funds kept their confidence and put cash into them in the latest week, according to Lipper data released on Thursday.

The weekly reporters saw $1.064 billion of inflows in the week ended Jan. 30 after inflows of $834.371 million in the previous week.
Exchange traded funds reported outflows of $239.027 million, after outflows of $117.588 million in the previous week. Ex-ETFs, muni funds saw inflows of $1.303 billion after inflows of $951.959 million in the previous week.

The four-week moving average remained positive at $1.099 billion, after being in the green at $683.673 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 $546.399 million in the latest week after inflows of $500.408 million in the previous week. Intermediate-term funds had inflows of $462.466 million after inflows of $243.066 million in the prior week.

National funds had inflows of $802.305 million after inflows of $701.121 million in the previous week. High-yield muni funds reported inflows of $295.001 million in the latest week, after inflows of $383.195 million the previous week.

Secondary market
Municipal bonds were stronger Friday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the one- to 30-year maturities.

High-grade munis were also stronger, with muni yields falling as much as four basis points across the curve.

Municipals were steady on Municipal Market Data’s AAA benchmark scale, which showed the yield on both the 10-year muni general obligation and on 30-year muni maturity remaining unchanged.

Treasury bonds were weaker as stock prices traded higher.

On Thursday, the 10-year muni-to-Treasury ratio was calculated at 82.2% while the 30-year muni-to-Treasury ratio stood at 100.7%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Previous session's activity
The Municipal Securities Rulemaking Board reported 40,746 trades on Thursday on volume of $15.80 billion.

California, New York and Texas were the municipalities with the most trades, with the Golden State taking 14.926% of the market, the Empire State taking 14.283% and the Lone Star State taking 10.342%.

Week's actively traded issues
Some of the most actively traded munis by type in the week ended Feb. 1 were from Puerto Rico, New York and California issuers, according to Markit.

In the GO bond sector, the Puerto Rico 8s of 2035 traded 28 times. In the revenue bond sector, the New York Metropolitan Transportation Authority 4s of 2020 traded 110 times. In the taxable bond sector, the California 7.55s of 2039 traded 18 times.

Week's actively quoted issues
Puerto Rico, New York and Illinois names were among the most actively quoted bonds in the week ended Feb. 1, according to Markit.

On the bid side, the Puerto Rico Sales Tax Financing Corp. revenue 6s of 2042 were quoted by 54 unique dealers. On the ask side, the New York City Housing Development Corp. revenue 2.85s of 2031 were quoted by 369 dealers. Among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 38 dealers.

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 Municipal bond funds State of Hawaii State of Washington L.A. Metropolitan Transportation Authority State of California State of Texas State of New York Metropolitan Transportation Authority Commonwealth of Puerto Rico Puerto Rico Sales Tax Financing Corp (COFINA) State of Illinois New York City Housing Development Corporation