Prices of top-rated municipal bonds finished mixed on Thursday, the last full trading day of the week, as traders saw yields drift higher on longer dated maturities.
There were no muni deals scheduled to be sold during Friday's abbreviated session and market activity was expected to be minimal ahead of the Passover and Easter holidays despite the release of the March employment report.
On Thursday, the Board of Regents for Texas A&M University sold two separate issues totaling almost $290 million in the competitive arena.
Secondary Market
Prices of top-quality munis closed unchanged to slightly lower. The yield on the 10-year benchmark muni general obligation on Thursday was unchanged from 1.93% on Wednesday, while the yield on 30-year GO was up one basis point to 2.80% from 2.79%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were lower. The yield on the two-year Treasury note rose to 0.54% from 0.53% on Wednesday, while the 10-year yield increased to 1.90% from 1.87% and the 30-year yield rose to 2.52% from 2.48%.
The 10-year muni to Treasury ratio was calculated at 101.4% versus 103.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 110.9% compared to 112.8%.
Primary Market
The Board of Regents for Texas A&M University sold two issues totaling $289 million in the competitive arena.
Wells Fargo won the $145.445 million of Series 2015B taxable permanent university fund bonds with a true interest cost of 2.9843%. The bonds were priced to yield from 0.12% with a 1% coupon in 2015 to 3.29% with a 3.29% coupon in 2030; a 2034 maturity was priced at par to yield 3.56% and a 2036 maturity was priced at par to yield 3.60%.
JPMorgan won the $143.555 million of Series 2015A permanent university fund bonds with a TIC of 3.1040%. The bonds were priced to yield from 0.12% with a 4% coupon in 2015 to 3.22% with a 4% coupon in 2036.
Both issues are rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
The Aggies last sold bonds competitively on Nov. 13, 2013, when Morgan Stanley won $209 million of Series 2013 permanent university fund bonds with a true interest cost of 2.7867%
The Week's Primary Market
The biggest sale of the week was the California Department of Water Resources' $765.93 million of power supply revenue bonds were priced for institutions by JPMorgan after a one-day retail order period.
Traders said the deal was attractively priced.
"The deal had over-demand," one trader said, adding "I think it was somewhere around twice over-subscribed."
Since 1995, the Department has sold approximately $29 billion of bonds, including water and power issues.
In other negotiated action, Citi priced the Illinois Municipal Electric Agency's $594 million power supply system revenue refunding bonds. Barclays Capital priced the Regents of the University of California's $500 million of taxable general revenue bonds. And Raymond James priced the New York City Municipal Water Finance Authority's $451 million of revenue bonds for institutional investors after a one-day retail order period.
The state of Utah competitively sold $224 million of unlimited tax general obligation refunding bonds. JPMorgan won the bonds with a true interest cost of 1.9479%. Since 1995, the Beehive State has sold $6.752 billion of GOs.
The Week's Most Actively Quoted Issues
Puerto Rico and Illinois names were among the most actively quoted issues in the week ended April 3, according to data released by Markit.
On the bid side, the Puerto Rico commonwealth 6s of 2039 were quoted by nine unique dealers. On the ask side, the Puerto Rico commonwealth 8s of 2035 were quoted by nine dealers. And among two-sided quotes, the Illinois 5.1s of 2033 were quoted by 11 dealers, Markit said.
The Week's Most Actively Traded Issues
Among the most actively traded issues in the week ended April 3, were issuers from California and New York, according to Markit.
In the GO bond sector, California 5s of 2026 were traded 21 times. In the revenue bond sector, California's Golden State Tobacco Securitization Corp. 5s of 2045 were traded 109 times. And in the taxable bond sector, the New York City Transitional Finance Authority 5.508s of 2037 were traded 20 times, according to Markit.
Tax-Exempt Money Market Funds Post Outflow
Tax-exempt money market funds had an outflow of $521.6 million, bringing total net assets to $259.47 billion, in the period ended March 30, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $521.6 million to $259.47 billion in the previous week.
The average, seven-day simple yield for the 396 weekly reporting tax-exempt funds remained at 0.01% for a 100th straight week.
The total net assets of the 991 weekly reporting taxable money funds fell $42.55 billion to $2.418 trillion in the period ended March 31, after experiencing an inflow of $32.79 billion to $2.461 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 10th consecutive week.
Overall, the combined total net assets of the 1,387 weekly reporting money funds decreased $44.36 billion to $2.676 trillion in the period ended March 31, which followed an inflow of $32.27 billion to $2.721 trillion in the prior period.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $2.402 billion to $11.651 billion on Thursday. The total is comprised of $3.690 billion competitive sales and $7.961 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,291 trades on Wednesday on volume of $8.375 billion. Most active, based on the number of trades, was the New York City Municipal Water Finance Authority's Series GG second general resolution water and sewer system revenue 3 1/8s of 2032, which traded 193 times at an average price of 98.547 with an average yield of 3.224%. The bonds were initially priced at 98.62 to yield 3.23%.
