Top-shelf municipal bonds were stronger at mid-session, according to traders who are looking ahead to next week’s new issue slate.
Ipreo estimates total bond volume for next week at $4 billion, down from a revised total of $5.9 billion this week, according to data from Thomson Reuters. Next week’s calculations do not include note sales and Texas plans a huge note offering next week.
Next week’s bond slate is composed of $3.4 billion of negotiated deals and $638.1 million of competitive sales.
The yield on the 10-year benchmark muni general obligation fell as much as two basis points from 1.92% on Thursday, while the 30-year GO yield declined as much as two basis points from 2.77%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were mixed on Friday. The yield on the two-year Treasury rose to 1.31% from 1.30% on Thursday, the 10-year Treasury yield slipped to 2.19% from 2.20% and the yield on the 30-year Treasury bond decreased to 2.77% from 2.78%.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 87.4%, compared with 86.3% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 99.7% versus 99.0%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 38,817 trades on Thursday on volume of $11.82 billion.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Aug. 18 were from Illinois and Florida issuers, according to Markit.
In the GO bond sector, the Chicago Board of Education 7s of 2046 were traded 25 times. In the revenue bond sector, the Miami-Dade County aviation 5s of 2040 were traded 54 times. And in the taxable bond sector, the Miami-Dade County aviation 3.982s of 2041 were traded 56 times.
Week's actively quoted issues
Puerto Rico, Ohio and Illinois names were among the most actively quoted bonds in the week ended Aug. 18, according to Markit.
On the bid side, the Puerto Rico Public Buildings Authority revenue 5.25s of 2042 were quoted by 56 unique dealers. On the ask side, the Ohio hospital revenue 3.25s of 2035 were quoted by 241 dealers. And among two-sided quotes, the Illinois state taxable 5.1s of 2033 were quoted by 30 unique dealers.
Week’s primary market
In the competitive arena, Maryland sold about $1.3 billion of general obligation bonds in two separate offerings this week. Bank of America Merrill Lynch won the $792.83 million of state and local facilities loan of 2017 Series B tax-exempt refunding GOs with a true interest cost of 1.6566%. Citigroup won the $550 million of state and local facilities loan of 2017 Series A tax-exempt GOs with a TIC of 2.2855%. Both sales are rated triple-A by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.
Mecklenburg County, N.C., sold $225 million of Series 2017A general obligation public improvement bonds. BAML won the bonds with a TIC of 2.74%. The deal is rated triple-A by Moody’s, S&P and Fitch.
The University of Alabama Board of Trustees competitively sold $192.41 million of general revenue bonds in three separate offerings. Wells Fargo Securities won the $152.47 million of Series 2017B tax-exempts with a TIC of 3.28%. Janney Montgomery won the $14.93 million of Series 2017A tax-exempts with a TIC of 1.39% and also won the $25.01 million of Series 2017C taxables with a TIC of 2.01%. All three deals are rated Aa2 by Moody’s and AA by S&P.
Hennepin County, Minn., competitively sold $100 million of Series 2017C general obligation bonds. JPMorgan Securities won the bonds with a TIC of 2.94%. The deal is rated AAA by S&P and Fitch.
In the negotiated sector, BAML priced the city and county of Honolulu’s $409.22 million of GOs in seven series. The deal is rated Aa1 by Moody’s and AA-plus by Fitch.
Citi priced the state of Louisiana’s $358.65 million of fuels tax revenue refunding bonds consisting of Series 2017B revenue refunding bonds and Series 2017C second lien revenue refunding bonds. The Series 2017B bonds are rated Aa2 by Moody’s and AA by S&P while the Series 2017C bonds are rated Aa3 by Moody’s and AA by S&P.
Citigroup priced the Colorado Health Facilities Authority’s $220 million of Series 2017 health facilities revenue and revenue refunding bonds for the Evangelical Lutheran Good Samaritan Society project. The deal is rated BBB by S&P and A-minus by Fitch.
Citi priced the Kentucky State Property and Building Commission’s $168.82 million of Project No. 117 tax-exempt revenue and revenue refunding bonds and $64.64 million of Series A taxable revenue bonds and taxable Series C revenue refunding bonds. The deal is rated A1 by Moody’s and A-plus by Fitch.
Citi priced Cook County, Ill.’s $165 million of Series 2017A sales tax revenue bonds. The deal is rated AAA by S&P.
Wells Fargo priced the Lake Oswego School District No. 7J, Ore.’s $161 million of Series 2017 GOs. The deal is rated Aa1 by Moody’s and AA-plus by S&P.
Goldman Sachs priced the Utah State Board of Regents’ $155.29 million of Series 2017A general revenue and refunding bonds for the University of Utah. The deal is rated Aa1 by Moody’s and AA-plus by S&P.
Barclays Capital Markets priced the Massachusetts Development Finance Agency’s $96.83 million of Series 2017A revenue bonds for Emerson College. The deal is rated Baa2 by Moody’s and BBB-plus by S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $335.2 million to $6.93 billion on Friday. The total is comprised of $3.19 billion of competitive sales and $3.75 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds put cash into the funds in the latest week, according to Lipper data.
The weekly reporters saw $586.766 million of inflows in the week of Aug. 16, after inflows of $631.216 million in the previous week.
The four-week moving average was positive at $421.205 million, after being in the green at $349.152 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 $378.696 million in the latest week after inflows of $406.426 million in the previous week. Intermediate-term funds had inflows of $158.569 million after inflows of $137.827 million in the prior week.
National funds had inflows of $555.401 million after inflows of $615.734 million in the previous week. High-yield muni funds reported inflows of $185.562 million in the latest reporting week, after inflows of $148.092 million the previous week.
Exchange traded funds saw inflows of $99.484 million, after inflows of $160.401 million in the previous week.