Prices of top-rated municipal bonds finished unchanged on Friday, traders said, as the market anticipated a rebound in issuance to about $8.8 billion, from the $6.5 billion that was priced in the April 6 week.
Secondary Market
The yield on the 10-year benchmark muni general obligation remained at 1.97% from Thursday, while the yield on 30-year GO stayed at 2.84, according to the final read of MMD's triple-A scale. On April 2, the 10-year yield stood at 1.93% while the 30-year yield was at 2.80%.
Municipal secondary trading was light on Friday, according to a research note from Interactive Data.
Treasury prices were mostly higher. The yield on the two-year Treasury note rose to 0.56% from 0.55% on Thursday, while the 10-year yield decreased to 1.95% from 1.96% and the 30-year yield fell to 2.58% from 2.60%.
The 10-year muni to Treasury ratio was calculated on Friday at 101.2% versus 100.6% on Thursday, while the 30-year muni to Treasury ratio stood at 110.2% compared to 109.3%.
The Week's Primary Market
The market was digesting the more than $6.5 billion of new deals that came to market in the week, supply that was headlined by the North Texas Tollway Authority's big offering.
Demand outstripped the supply for the Tollway's revenue refunding bonds, officials said, with over $3 billion of orders coming in for only $863 million of bonds. The authority saw a net present value savings of about 10% or almost $90 million on the sale. The bonds were rated A3 by Moody's Investors Service and BBB-plus by Standard & Poor's.
The authority currently has more than $7 billion of revenue bonds outstanding. Since 1997, the authority has sold almost $13 billion of bonds.
Another issuer that took center stage during the week was the Dormitory Authority of the State of New York, which came to market with deals for three universities.
Morgan Stanley priced DANSY''s $692.47 million of Series 2015A revenue bonds for New York University after a one-day retail order period. Morgan Stanley also priced DASNY's $265.97 million of Series 2015B taxable revenue bonds for NYU. The NYU bonds were rated Aa3 by Moody's and AA-minus by S&P.
Goldman, Sachs priced DASNY's $124.29 million of Series 2015A revenue bonds for The New School. The New School bonds were rated A3 by Moody's and A-minus by S&P. And Goldman priced DASNY's $47.81 million Series 2015B revenue bonds for Columbia University. The Columbia University bonds were rated triple-A by Moody's and S&P.
In the competitive arena, North Carolina sold $231.36 million of general obligation bonds. Wells Fargo won the deal with a true interest cost of 2.5954%. The deal was rated triple-A by Moody's, S&P and Fitch Ratings.
And Bank of America Merrill Lynch won Howard County, Md.'s $178.42 million of Series 2015A GO consolidated public improvement project and refunding bonds with a TIC of 2.6606%. The deal was rated triple-A by Moody's, S&P and Fitch.
The Week's Most Actively Quoted Issues
Puerto Rico and New York names were among the most actively quoted issues in the week ended April 10, according to data released by Markit.
On the bid side, the Puerto Rico Aqueduct and Sewer Authority revenue bonds 5 1/4s of 2042 were quoted by 10 unique dealers. On the ask side, the New York City Municipal Water Finance Authority's water and sewer system revenue 5s of 2039 were quoted by 15 dealers. And among two-sided quotes, the Puerto Rico commonwealth 8s of 2035 were quoted by eight dealers, Markit said.
The Week's Most Actively Traded Issues
Among the most actively traded issues in the week ended April 10, were issuers from California and Massachusetts, according to Markit.
In the revenue bond sector, the California state Department of Water Resources power supply 5s of 2022 were traded 120 times. In the GO bond sector, Massachusetts 3s of 2025 were traded 33 times. And in the taxable bond sector, the University of California revenue 4.767s of 2015 were traded 27 times, according to Markit.
Tax-Exempt Bond Funds See Outflow
Municipal bond funds which report weekly, posted $32.810 million of outflows in the week ended April 8, after experiencing outflows of $300.580 million in the week ended April 1, according to the latest Lipper data.
The four-week moving average remained positive at $95.488 million in the latest week after being in the green at $141.929 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds saw inflows, gaining $227.106 million in the latest week, after experiencing outflows of $49.567 million in the previous week.
High-yield muni funds recorded an inflow of $129.963 million in the latest reporting week, after seeing inflows of $1.733 million in the previous week. Exchange-traded funds had inflows of $96.832 million, after recording inflows of $72.441 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $2.124 billion of outflows in the week ended April 1, according to the Investment Company Institute. ICI reported inflows into long-term funds of $1.770 billion in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $4.029 billion to $12.640 billion on Friday. The total is comprised of $3.941 billion competitive sales and $8.699 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,835 trades on Thursday on volume of $11.913 billion. Most active, based on the number of trades, was the New York State Dormitory Authority's Series 2015A non-state supported debt revenue bonds for The New School, 4s of 2050, which traded 161 times at an average price of 99.831 with an average yield of 3.98%. The bonds were initially priced at 98.141 to yield 4.10%.
