Top-rated municipal bonds ended unchanged in quiet activity on Wednesday, according to traders, as primary action dwindled down to the week’s last few deals.
Traders were eyeing yields, which have been drifting lower over the past month.
Secondary market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.86% on Tuesday, while the 30-year GO yield was steady from 2.71%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were little changed on Wednesday. The yield on the two-year Treasury rose to 1.33% from 1.32% on Tuesday, the 10-year Treasury yield was unchanged from 2.14% and the yield on the 30-year Treasury bond was flat from 2.75%.
The 10-year muni-to-Treasury ratio was calculated at 87.1% on Wednesday, compared with 87.1% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 98.7% versus 98.7%, according to MMD.
MMD yields show little change in August
Municipal bond yields have shown little change since Aug. 1, according to data taken from the MMD benchmark scale on the 10-year and 30-year muni bond. Yields have slipped over the past 30 days.
On Aug. 30, the 10-year stood at 1.86%, nine basis points lower than the read of 1.95% on Aug. 1.
Similar results were recorded for the 30-year muni over the course of the month.
On Aug. 30, the 30-year stood at 2.71%, three basis points lower than the read of 2.74% on Aug. 1.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 33,836 trades on Tuesday on volume of $8.88 billion.
Primary market
In the short-term competitive arena on Wednesday, the South Carolina Association of Governmental Organizations sold $131.1 million of certificates of participation in two separate offerings.
Bank of America Merrill Lynch won the $114.95 million of Series 2017D tax-exempt COPs with a bid of 3% and a premium of $1,092,015.49, an effective rate of 0.867733%. The COPs, due March 1, 2018, were reoffered as 3s to yield 0.80%.
Jefferies won the $17.15 million of Series 2017C taxable COPs with a bid of 2% and a premium of $42,184.08, an effective rate of 1.446931%.
The SCAGO COPs are rated Aa1 by Moody’s Investors Service.
Goldman Sachs priced the Southern California Public Power Authority’s $107.83 million of Series 2017-1 refunding revenue bonds for Magnolia Power Project A.
Pricing information was not available.
The deal, which consists of mandatory put bonds, is rated AA-minus by Fitch Ratings.
Goldman received the written award on California’s $2.54 billion of general obligation bonds.
“The strong demand for California’s bonds and the low interest rates that were achieved are a testament to investor confidence in our state’s economy and financial management,” State Treasurer John Chiang said. “The sale of these bonds will provide funding for vital infrastructure projects and will save taxpayers hundreds of millions of dollars over the life of the bonds due to refinancing.”
At the final pricing the $802.4 million of various purpose GOs were priced to yield from 0.77% with 3% and 5% coupons in a split 2018 maturity to 2.26% with a 5% coupon in 2028 and to yield 2.50% with a 5% coupon in 2031, 2.86% with a 4% coupon and 2.56% with a 5% coupon in a split 2032 maturity, 2.72% with a 5% coupon in 2035 and 3.27% with a 4% coupon and 2.93% with a 5% coupon in a split 2047 maturity.
The $1.74 billion of various purpose refunding GOs were priced to yield from 0.77% with 3% and 4% coupons in a split 2018 maturity to 3.08% with a 4% coupon and 2.76% with a 5% coupon in a split 2037 maturity.
The deal is rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
There are no major competitive or negotiated deals scheduled for the rest of the week.
