Munis end 2020 on quiet note

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Municipals finished out an abbreviated trading session little changed as market players eye the first week of 2021’s new-issue slate, which checks in at over $2 billion.

Yields on top-rated munis were flat across AAA scales. Traders again saw an abbreviated trading session ahead of the long New Year’s holiday weekend.

The books have been closed on 2020 and not a minute too soon, says Greg Saulnier, managing analyst at Refinitiv Municipal Market Data.

“Despite an extremely volatile March when the COVID-19 pandemic first shook investors stateside, munis have since found their footing and then some thanks in large part to accommodative monetary policy, fiscal stimulus, and most recently, vaccine rollouts,” he said

“Coupled with over $20 billion in total weekly muni fund inflows (according to Lipper and inclusive of the nearly $31 billion in outflows from the week ended March 4th to the week ended April 8th) as of last week and an ongoing supply/demand imbalance, both the MMD AAA 10-year and 30-year spots will close this afternoon at their lowest Dec. 31st yield since MMD began tracking data in 1982,” Saulnier said.

Primary market
IHS Ipreo estimates volume for the upcoming week at $2.4 billion, up from the under $1 billion mark seen in the previous week. The calendar is composed of $1.6 billion of negotiated deals and $768 million of competitive sales.

Refinitiv MMD estimates the supply total consists of $2 billion of tax-exempts and $393 million of taxables. The year-to-date weekly average volume has been $6.03 billion.

RBC Capital Markets is set to price the City and County of Denver School District No. 1, Colo.'s (Aa1/AA+/AA+/) $450 million of general obligation refunding bonds on Thursday. The deal is backed by the Colorado State Intercept Program.

Loop Capital Markets is expected to price the New Jersey Economic Development Authority’s (Baa1/BBB/BBB+/NR) $350 million of Series 2021 QQQ school facilities construction social bonds on Thursday.

Wells Fargo Securities is ready to price the California Infrastructure and Economic Development Bank’s $271.5 million of Series 2021A, B and C refunding revenue bonds for the Los Angeles County Museum of Art project.

Stifel is set to price the San Jose Unified School District, Santa Clara County, Calif.’s (/AA+//) $146 million of taxable GO refunding bonds on Thursday.

In the competitive arena, Nassau County, N.Y., (A2/A+/A/) will be selling $370 million of notes in four offerings on Tuesday. The sales consist of $110 million of Series 2021A revenue anticipation notes, $110 million of Series 2021A tax anticipation notes, $110 million of Series 2021B TANs and $40 million of Series 2021B RANs.

On Wednesday, Westchester County, N.Y., will sell $200 million of TANs in two sales consisting of $150 million of Series 2021B TANs and $50 million of Series 2021A TANs.

Informa: Muni money market funds fall $1.14B
Tax-exempt municipal money market fund assets fell $1.14 billion in the week ended Dec. 28, bringing total net assets to $105.86 billion, according to the Money Fund Report, a publication of Informa Financial Intelligence.

In the week ended Dec. 21, tax-free fund assets decreased by $398.6 million to $106.99 billion.

The average seven-day simple yield for the 185 tax-free and municipal money-market funds remained at 0.01% from the previous week.

Taxable money-fund assets decreased $23.44 billion in the week ended Dec. 29, bringing total net assets to $4.126 trillion. The average, seven-day simple yield for the 777 taxable reporting funds remained at 0.02% from the prior week.

Overall, the combined total net assets of the 962 reporting money funds fell $24.58 billion in the week ended Dec. 29.

Secondary market
High-grade municipals were unchanged again on Thursday, according to final readings on Refinitiv MMD’s AAA benchmark scale. Short yields were steady at 0.13% in 2021 and 0.14% in 2022. Out longer, the yield on the 10-year muni was flat at 0.71% while the yield on the 30-year remained at 1.39%. The 10-year muni-to-Treasury ratio was calculated at 77.2% while the 30-year muni-to-Treasury ratio stood at 84.2%, according to MMD.

The ICE AAA municipal yield curve showed short maturities flat at 0.13% in 2021 and at 0.15% in 2022. The 10-year maturity was at 0.68% while the 30-year yield was at 1.42%. The 10-year muni-to-Treasury ratio was calculated at 74% while the 30-year muni-to-Treasury ratio stood at 86%, according to ICE.

The IHS Markit municipal analytics AAA curve showed yields remaining unchanged, at 0.11% in 2021 and 0.12% in 2022 while the 10-year was at 0.64% while the 30-year yield was at 1.34%.

Treasuries were little changed as stock prices traded mixed. The three-month Treasury note was yielding 0.08%, the 10-year Treasury was yielding 0.92% and the 30-year Treasury was yielding 1.65%. The Dow was unchanged, the S&P 500 increased 0.02% and the Nasdaq lost 0.20%.

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Primary bond market Secondary bond market Municipal bond funds Denver School District #1 New Jersey Economic Development Authority San Diego Unified School District California Infrastructure and Economic Development Bank County of Nassau, NY County of Westchester, NY
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