Munis weaker as few deals trickle in

The last issuance of the week started to come in on Thursday, as munis were weaker still.

Secondary market
The yield on the 10-year benchmark muni general obligation was as many as two basis points higher from 1.98% from on Wednesday, while the 30-year GO yield also increased as many as two basis points from 2.84%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were mixed on Thursday around midday. The yield on the two-year Treasury dipped to 1.46% from 1.47%, the 10-year Treasury yield was flat at 2.33% and the yield on the 30-year Treasury bond rose to 2.89% from 2.88%.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 85.9% compared with 86.1% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 99.3% versus 100.3%, according to MMD.

Primary market
RBC Capital Markets received the written award for the Pennsylvania Economic Development Authority’s $436.75 million of revenue bonds for the University of Pittsburgh Medical Center on Thursday. The bonds were priced to yield from 0.98% with a 4% coupon in 2018 to 3.60% with a 4% coupon in 2037. A term bond in 2042 was priced to yield 3.73% with a 4% coupon and a term bond in 2047 was priced to yield 3.80% with a 4% coupon. The deal is rated A1 by Moody’s Investors Service, A-plus by S&P Global Ratings and AA-minus by Fitch Ratings.

Morgan Stanley priced the Industrial Development Authority of the County of Maricopa, Ariz.’s $362.07 million of revenue bonds for Banner Health. The $189.52 million of Series 2017A bonds were priced to yield 3.70% with a 4% coupon and 3.30% with a 5% coupon in a split 2041 bullet maturity.

The $86.275 million of Series 2017B bonds were priced to yield 1.78% with a 5% coupon in a bullet 2048 maturity.

The $86.275 million of Series 2017C bonds were priced to yield 2.22% with a 5% coupon in a bullet 2024 maturity. The deal is rated AA-minus by S&P Global Ratings and Fitch Ratings.

On the competitive side, the California State Public Works Board sold $202.325 million of various lease revenue bonds. Wells Fargo appeared to have the high bid of 2.49%. No further pricing information was immediately available. The deal is rated A1 by Moody’s and A-plus by S&P and Fitch Ratings.

Since 2007, the California PWB has sold about $13.57 billion of securities, with the most issuance in 2009 when it sold $2.19 billion. The board saw the lowest year of issuance in 2008 when it sold $365 million. With Thursday’s sale, the board sold more this year than last year.

BB-092917-MUN

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 42,958 trades on Wednesday on volume of $14.567 billion.

Tax-exempt money market funds see outflows
Tax-exempt money market funds experienced outflows of $327.1 million, lowering total net assets to $127.90 billion in the week ended Sept. 25, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $236.6 million to $128.23 billion in the previous week.

The average, seven-day simple yield for the 224 weekly reporting tax-exempt funds moved up to 0.40% from 0.37% the previous week.

The total net assets of the 830 weekly reporting taxable money funds increased $30.27 billion to $2.587 trillion in the week ended Sept. 26, after an outflow of $25.08 billion to $2.557 trillion the week before.

The average, seven-day simple yield for the taxable money funds held steady at 0.68% from the prior week.

Overall, the combined total net assets of the 1,054 weekly reporting money funds increased $29.94 billion to $2.715 trillion in the week ended Sept. 26, after outflows of $24.85 million to $2.685 trillion in the prior week.

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