Top-rated municipal bonds ended stronger on Thursday, traders said, as the last of the week’s larger sales hit the screens.
The yield on the 10-year benchmark muni general obligation fell two basis points to 1.88% from 1.90% on Wednesday, while the 30-year GO yield dropped one basis point to 2.73% from 2.74%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were mixed on Thursday. The yield on the two-year Treasury was unchanged from 1.33% on Wednesday, the 10-year Treasury yield dipped to 2.21% from 2.24% and the yield on the 30-year Treasury bond decreased to 2.79% from 2.82%.
The 10-year muni-to-Treasury ratio was calculated at 85.1% on Thursday, compared with 84.9% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 98.1% versus 97.3%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 38,440 trades on Wednesday on volume of $11.895 billion.
Action picked up on Thursday, as Miami-Dade County, Fla., came to market with about $648 million of aviation revenue and revenue refunding bonds, consisting of tax-exempt Series 2017B bonds subject to the alternative minimum tax and Series 2017D taxable bonds.
Goldman Sachs priced the $380.22 million of Series 2017B AMT tax-exempts as 5s to yield 1.05% in 2018 and 1.18% in 2019; and as 2 3/4s and 5s to yield 1.29% in a split 2020 maturity; and as 5s to yield 3.20% in 2037 and 3.24% in 2040. Information on the taxable portion of the sale was unavailable.
The deal is rated A by S&P Global Ratings and Fitch Ratings, and AA-minus by Kroll Bond Rating Agency.
Since 2007, Miami-Dade County has sold $17.82 billion of securities, with the most issuance occurring in 2010 when it sold $2.38 billion. The county saw a low in that period of $469 million in 2011.
Citigroup priced the $202.35 million of the St. Paul Housing and Redevelopment Authority, Minn.’s $202.35 million of Series 2017A healthcare system revenue bonds for Fairview Health Services.
The issue was priced to yield from 0.95% with a 2% coupon in 2018 to 3.47% with a 4% coupon in 2037; a 2043 maturity was priced as 4s to yield 3.58% and a 2047 maturity was priced as 5s to yield 3.27%.
The deal is rated A2 by Moody’s Investors Service and A-plus by S&P.
Barclays Capital Markets priced the California Statewide Communities Development Authority’s $148.64 million of Series 2017 student housing revenue bonds for the University of California’s Irvine East campus apartments, Phase IV-A.
The issue was priced as 5s to yield from 1.21% in 2021 to 3.10% in 2037, 3.16% in 2042, 3.22% in 2047 and 3.27% in 2050.
The deal is rated Baa1 by Moody’s.
Citi priced the Palm Beach County Solid Waste Authority, Fla.’s $107.88 million of Series 2017 taxable refunding revenue bonds.
The issue was priced at par to yield from 1.585% in 2019 to 2.636% in 2024.
The deal is rated Aa2 by Moody’s and AA-plus by S&P.
Piper Jaffray priced Issaquah School District No. 411, Wash.’s $104.33 million of Series 2017 unlimited tax general obligation bonds.
The bonds were priced to yield 0.86% with a 5% coupon in 2018 and from 1.44% with a 5% coupon in 2023 to 2.53% with a 5% coupon in 2032.
The deal is insured by the Washington School Bond Guarantee Program and rated Aaa by Moody’s and AA-plus by S&P.
Raymond James & Associates received the written award on the Hays Consolidated Independent School District, Texas’ unlimited tax school building bonds.
The issue was priced to yield from 0.79% with a 2% coupon in 2018 to 2.39% with a 5% coupon in 2030 and to yield from 2.90% with a 3.25% coupon in 2032 to 2.79% with a 5% coupon in 2038; a 2042 maturity was priced as 4s to yield 3.19%.
The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody’s and Fitch.
Bank of America Merrill Lynch priced the Ohio Water Development Authority’s $250 million of Series 2017B water pollution control loan fund revenue notes to yield 22 basis points over the SIFMA rate.
The deal is rated triple-A by Moody’s and S&P.
In the short-term competitive sector, Woodbridge Township, N.J., sold $147.25 million of bond anticipation notes, consisting of $95.8 million general BANs, $38 million of sewer utility BANs and $13.45 million of recreation utility BANs.
RBC Capital Markets won $70 million of the deal, taking $30 million with a bid of 2.50%, a premium of $456,300, an effective rate of 0.974763%; taking $20 million with a bid of 2.50%, a premium of $306,200, an effective rate of 0.964735%; taking $10 million with a bid of 2.50%, a premium of $155,200, an effective rate of 0.943677%; and taking $10 million with a bid of 2.50%, a premium of $157,200, an effective rate of 0.923621%.
Jefferies won $67.25 million of the deal, taking $57.25 million with a bid of 2%, a premium of $588,530, an effective rate of 0.969136% and taking $10 million with a bid of 2%, a premium of $202,800, an effective rate of 0.983175%.
The deal is rated SP1-plus by S&P.
Muni CUSIP requests fell 36% in July
Demand for new municipal CUSIP identifiers fell 36% in July, CUSIP Global Services said on Thursday. The report tracks requests by issuers for bond identifiers as an early indicator of new volume.
A total of 1,092 new municipal identifier requests were made last month, compared to 1,715 in June.
Municipal bond requests also decreased in July. A total of 826 muni identifier requests were made during the month, a 26% decline from June’s 1,320.
On a year-over-year basis, municipal request volume was down 22% through the end of July, reflecting ongoing volatility in municipal issuance volume over the course of this year.
“This pattern of consecutive months of strong growth in CUSIP request volume, punctuated by a month of more moderate activity, has been playing out repeatedly since the fourth quarter of 2016,” Gerard Faulkner, director of operations for CUSIP Global Services, said in a press release. “On a relative historical basis, overall volumes are still very strong, but the pauses do suggest a cautiousness among market participants when it comes to bringing new securities into the marketplace.”
Long-term muni note CUSIP requests fell to 81 last month compared to 129 in June. Short-term muni note CUSIP demand also retreated last month as 123 orders were made compared to 184 in June. For the first seven months of 2017, total municipal security CUSIP orders for all muni asset classes totaled 8,678, down 22% from 11,123 in the same time period last year.
Tax-exempt money market funds see inflows
Tax-exempt money market funds experienced inflows of $493.5 million, bringing total net assets to $130.73 billion in the week ended Aug. 7, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $231.2 million to $130.23 billion in the previous week.
The average, seven-day simple yield for the 227 weekly reporting tax-exempt funds decreased to 0.34% from 0.37% the previous week.
The total net assets of the 850 weekly reporting taxable money funds increased $37.39 billion to $2.528 trillion in the week ended Aug. 8, after an inflow of $10.72 billion to $2.490 trillion the week before.
The average, seven-day simple yield for the taxable money funds was unchanged at 0.66% from the prior week.
Overall, the combined total net assets of the 1,077 weekly reporting money funds increased $37.88 billion to $2.658 trillion in the week ended Aug. 8, after inflows of $10.95 million to $2.621 trillion in the prior week.