Top shelf municipal bonds finished stronger on Thursday, traders said, with yields on some maturities falling by as much as four basis points while the last of the week's big new issues came to market.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell four basis points to 1.41% from 1.45% on Wednesday, while the yield on the 30-year muni dropped two basis points to 2.15%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Thursday. The yield on the two-year Treasury dropped to 0.64% from 0.67% on Wednesday, the 10-year Treasury yield declined to 1.50% from 1.55% and the yield on the 30-year Treasury bond decreased to 2.25% from 2.29%.
The 10-year muni to Treasury ratio was calculated at 93.9% on Thursday compared to 94.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 95.3% versus 94.7%, according to MMD.
Primary Market
Bond sales streamed in for a third day as Ramirez & Co. priced the Austin Independent School District, Texas' $326.76 million of Series 2016A, B and C unlimited tax refunding bonds.
The $100.56 million of Series 2016A bonds were priced to yield from 0.45% with a 4% coupon in 2017 to 2.56% with a 4% coupon in 2036.
The $182.03 million of Series 2016B bonds were priced to yield from 0.45% with a 4% coupon in 2017 to 2.56% with a 4% coupon in 2036.
The $44.18 million of Series 2016C bonds were priced as 5s to yield 1.63% in 2025 and 1.74% in 2026 and to yield from 1.93% with a 5% coupon in 2028 to 2.49% with a 4% coupon in 2033.
The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody's Investors Service and Fitch Ratings.
Citigroup priced Guam's $237.92 million of Series 2016A limited obligation Section 30 bonds.
The issue was priced to yield from 0.92% with a 2% coupon in 2016 to 2.94% with a 5% coupon in 2036; a 2046 term bond was priced as 5s to yield 2.98%. The deal is rated BBB-plus by S&P Global Ratings.
Since 2007, Guam has issued $1.74 billion of securities, with the largest issuance coming in 2009 when it sold $474 million. With Thursday's sale, it is the first time Guam has issued in consecutive years since 2011, when it then came to market for three straight years.
Siebert Brandford Shank & Co. priced the Oakland Unified School District, Calif.'s $220.64 million of Series 2016A Election of 2006 general obligation bonds and Series 2016 GO refunding bonds.
The $65 million of Series 2016A GOs were priced to yield from 0.78% with a 4% coupon in 2020 to 2.53% with a 4% coupon in 2036; a 2041 maturity was priced as 3s to yield 3.07%.
The Series 2016 GO refunding bonds were priced to yield from 0.49% with a 2% coupon in 2017 to 2.05% with a 5% coupon in 2031.
The deal is rated Aa3 by Moody's, AA-minus by S&P and triple-A by Fitch.
RBC Capital Markets priced Hamilton County, Ohio's $324.04 million of Series 2016A sales tax refunding bonds.
The issue was priced to yield from 0.63% with a 3% coupon in 2017 to 2.58% with a 4% coupon in 2032. The deal is rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Wells Fargo Securities priced the Alaska Housing Finance Corp.'s $100 million of Series 2016A general mortgage revenue bonds.
The issue was priced at par to yield from 0.45% and 0.50% in a split 2017 maturity to 2.25% and 2.30% in a split 2036 maturity. A 2033 maturity was priced at par to yield 3%, a 2036 maturity was priced at par to yield 3.15%, a 2041 maturity was priced at par to yield 3.25% and a 2046 PAC maturity was priced as 3 1/2s to yield 1.75%. The deal is rated AA-plus by S&P and Fitch.
JPMorgan Securities priced Forsyth, Mont.'s $144.66 million of Series 2016 pollution control revenue refunding bonds for the NorthWestern Corp.'s Colstrip Project. The issue was priced at par to yield 2% in 2023. The deal is rated A1 by Moody's and A-minus by S&P.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,117 trades on Wednesday on volume of $13.77 billion.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $1.76 billion, bringing total net assets to $184.16 billion in the week ended Aug. 1, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $2.49 million to $185.92 billion in the previous week.
The average, seven-day simple yield for the 271 weekly reporting tax-exempt funds was increased to 0.08% from 0.07% the previous week.
The total net assets of the 890 weekly reporting taxable money funds increased $14.64 billion to $2.534 trillion in the week ended Aug. 2, after an inflow of $17.31 billion to $2.520 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.11% from the week before.
Overall, the combined total net assets of the 1,161 weekly reporting money funds increased $12.88 billion to $2.718 trillion in the period ended Aug. 2, which followed an inflow of $14.82 billion to $2.706 trillion.
