Municipal bonds were trading stronger at mid-session as the last of this week’s larger new issue deals hit traders' screens.

Secondary market

The yield on the 10-year benchmark muni general obligation fell as much as two basis points from 2.02% on Wednesday, while the 30-year GO yield dropped as much as two basis points from 2.88%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were mixed on Thursday. The yield on the two-year Treasury rose to 1.26% from 1.24% on Wednesday as the 10-year Treasury yield gained to 2.22% from 2.21% while the yield on the 30-year Treasury bond was unchanged from 2.90%.

On Wednesday, the 10-year muni to Treasury ratio was calculated at 91.1%, compared with 89.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 99.3%, versus 99.0%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 47,313 trades on Wednesday on volume of $18.18 billion.

Primary market
Bank of America Merrill Lynch priced the city of Charlotte, N.C.’s $305.8 million of airport revenue bonds for the Charlotte Douglas International Airport on Thursday.

The $168.45 million of Series 2017A bonds not subject to the alternative minimum tax were priced as 5s to yield from 1.09% in 2019 to 3.12% in 2037; a 2042 maturity was priced as 5s to yield 3.21% and a 2047 maturity was priced as 5s to yield 3.26%.

The $16.37 million of Series 2017B AMT bonds were priced as 5s to yield from 1.24% in 2019 to 3.37% in 2037; a 2042 maturity was priced as 5s to yield 3.46% and a 2047 maturity was priced as 5s to yield 3.51%.

The bonds are rated Aa3 by Moody’s Investors Service and AA-minus by Fitch Ratings. Both rating agencies assign a stable outlook to the credit.

Since 2007, Charlotte has sold roughly $4.91 billion of bonds, with the largest issuance occurring in 2009 when it sold $1.13 billion.

The Queen City has sold less than $1 billion every year other than 2009, with the smallest issuance in 2012 when it sold $196 million. With Thursday’s sale, the city has already issued more bonds in 2017 than it did in all of last year.

RBC Capital Markets received the official award on the Frisco Independent School District, Texas’ $206.45 million of Series 2017 unlimited tax school building and refunding bonds.

The issue was priced to yield from 0.90% with a 2% coupon in 2018 to 3.30% with a 4% coupon in 2037; a 2042 maturity was priced as 4s to yield 3.44% and a 2047 maturity was priced as 4s to yield 3.52%.

The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.

Goldman Sachs received the written award on the Massachusetts Development Finance Agency’s $103.24 million of revenue bonds for Williams College.

The $52.77 million of Series 2017S bonds were priced as 5s to yield from 1.45% in 2023 to 2.43% in 2030; a 2046 maturity was priced as 4s to yield 3.46%.

The $50.47 million of Series 2011N bonds were priced as a remarketing at par to yield 1.45% in 2041 with a mandatory tender date in 2021.

The deal is rated Aa1 by Moody’s and AA-plus by S&P.

Citigroup is set to price the Tennessee Housing Development Agency’s $175 million of residential finance program bonds for institutions after holding a one-day retail order period on the offering.

The $23.11 million of Issue 2017-2A bonds subject to the alternative minimum tax were not priced for retail.

The $151.89 million of Issue 2017-2B non-AMT bonds were priced at par to yield from 1.10% and 1.15% in a split 2019 maturity to 3.15% in 2030, and to yield 3.40% in 2032 and 3.70% in 2036. The split 2018 maturities were offered as sealed bids while the 2042 maturity was not priced for retail.

The deal is rated Aa1 by Moody’s and AA-plus by S&P Global Ratings.

RBC is expected to price the Colorado Education and Cultural Facilities Authority’s $149.66 million of revenue bonds for the University of Denver.

The offering consists of Series 2017A tax-exempts and Series 2017B taxables.

Bond Buyer 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $2.21 billion to $11.83 billion on Thursday. The total is comprised of $3.76 billion of competitive sales and $8.07 billion of negotiated deals.

Tax-Exempt Money Market Fund outflows
Tax-exempt money market funds experienced outflows of $210.1 million, lowering total net assets to $129.51 billion in the week ended May 15, according to The Money Fund Report, a service of iMoneyNet.com.

This followed an inflow of $1.17 million to $129.72 billion in the previous week.

The average, seven-day simple yield for the 232 weekly reporting tax-exempt funds decreased to 0.33% from 0.37% from the previous week.

The total net assets of the 856 weekly reporting taxable money funds decreased $6.91 billion to $2.483 trillion in the week ended May 16, after an outflow of $5.24 billion to $2.490 trillion the week before.

The average, seven-day simple yield for the taxable money funds was changed at 0.44% from the prior week.

Overall, the combined total net assets of the 1,088 weekly reporting money funds decreased $7.12 billion to $2.613 trillion in the week ended May 16, after outflows of $4.07 billion to $2.620 trillion in the prior week.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.