Prices of top-rated municipal bonds finished out the week unchanged, according to traders, as the market worked off the week's hefty volume.
The Secondary Market
The yield on the 10-year benchmark muni general obligation on Friday was unchanged from 1.94% on Thursday, while the yield on the 30-year GO remained at 2.83%, according to the final read of Municipal Market Data's triple-A scale. Trading was light in the secondary, according to Interactive Data.
On Friday, April 10, the yield on the 10-year muni stood at 1.97% while the yield on the 30-year was at 2.84%.
Treasury prices were mixed on Friday as the yield on the two-year Treasury note rose to 0.50% from 0.48% on Thursday, while the 10-year yield fell to 1.85% from 1.89% and the 30-year yield decreased to 2.51% from 2.56%.
The 10-year muni to Treasury ratio was calculated on Friday at 105.0% versus 103.3% on Thursday, while the 30-year muni to Treasury ratio stood at 113.1% compared to 110.7%.
The Week's Primary Market
Almost $8 billion of bonds came to market during the week ended April 17, according to Thomson Reuters, with the calendar consisting of about $5.4 billion of negotiated deals and $2.6 billion of competitive sales.
The Port Authority of New York and New Jersey topped the new issue calendar. The $775 million deal was priced by Bank of America Merrill lynch after being offered to retail investors. Proceeds of the sale are being used to refund about $525 million of outstanding bonds and to fund the port authority's ongoing capital program.
Demand was good for the bonds, traders said, which were rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
The Port Authority was last in the market in in October of 2014 when it sold $650 million of bonds; since 1995, it has sold about $31 billion of bonds.
Loop Capital Markets priced the New York City Transitional Finance Authority's $650 million of Fiscal 2015 Subseries E-1 future tax secured subordinate bonds after a holding a two-day order period for retail investors. The TFA also competitively sold $200 million of Fiscal 2015 Series E Subseries E-2 future tax secured taxable subordinate bonds. The deal was won by Stifel with a true interest cost of 3.0201%. Both the tax-exempts and the taxables were rated Aa1 by Moody's and triple-A by S&P and Fitch.
The TFA said it received about $140 million of retail orders and around $606 million of priority orders from institutional investors for the rest of the issue. The TFA also said it received 10 bids on the sale of its taxable new money bonds.
On Wednesday, April 22, the TFA will offer $190 million of tax-exempt new money variable-rate demand bonds, bringing the total amount of the current sale to $1.04 billion.
Morgan Stanley priced the New Jersey Educational Facilities Authority's $158 million of revenue refunding bonds for Princeton University. Proceeds of the Princeton sale will be used to finance the current refunding of the university's 2005 Series B revenue bonds. The bonds were rated triple-A by Moody's and Fitch. Since 1995, the EFA has sold almost $3 billion of debt for Princeton.
In the competitive arena, the Florida Board of Education sold $258.5 million of 2015 Series D public education capital outlay refunding bonds. Goldman, Sachs won the issue with a TIC of 1.2824%. The bonds were rated Aa1 by Moody's and triple-A by S&P and Fitch.
The Boulder Valley School District Number RE-2, Colo., competitively sold $250 million of Series 2015 general obligation bonds. Morgan Stanley won the issue with a TIC of 2.8571%. The deal was rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
And the state of Virginia sold $214.88 million of Series 2015B general obligation refunding bonds. Citi won the deal with a TIC of 2.2654%. The deal was rated triple-A by Moody's, S&P and Fitch.
The Week's Most Actively Quoted Issues
Chicago and California names were among the most actively quoted issues in the week ended April 17, according to data released by Markit.
On the bid side, the Chicago 5.432s of 2042 were quoted by 10 unique dealers. On the ask side, the California State Tobacco Securitization Corp. 5s of 2045 were quoted by 14 dealers. And among two-sided quotes, the California 7.55s of 2039 were quoted by 10 dealers, Markit said.
The Week's Most Actively Traded Issues
Among the most actively traded issues in the week ended April 17, were issuers from New York and New Jersey and West Virginia, according to Markit.
In the revenue bond sector, the Monongalia Co., W.Va., 4s of 2035 were traded 48 times. In the GO bond sector, the Port Authority of New York & New Jersey 3 1/4s of 2033 were traded 48 times. And in the taxable bond sector, the Port Authority of New York & New Jersey 2 1/2s of 2022 were traded 18 times, according to Markit.
Tax-Exempt Bond Funds See Outflow
Municipal bond funds which report weekly, posted $486.312 million of outflows in the week ended April 15, after experiencing outflows of $32.810 million in the week ended April 8, according to the latest Lipper data.
The four-week moving average turned negative at $59.509 million in the latest week after being positive at $95.488 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds saw inflows, gaining $237.634 million in the latest week, after experiencing inflows of $227.106 million in the previous week.
High-yield muni funds recorded an inflow of $49.576 million in the latest reporting week, after seeing inflows of $129.963 million in the previous week. Exchange-traded funds had inflows of $126.797 million, after recording inflows of $96.832 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $187 million of outflows in the week ended April 8, according to the Investment Company Institute. ICI reported inflows into long-term funds of $96 million in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.602 billion to $11.832 billion on Friday. The total is comprised of $3.859 billion competitive sales and $7.973 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 44,283 trades on Thursday on volume of $14.410 billion.
The most active bond, based on the number of trades, was the Chicago Series 2012B taxable GO project and refunding 5.432s of 2042, which traded 231 times at an average price of 87.817 with an average yield of 6.388%. The bonds were initially priced at par to yield 5.432%.
