Top quality municipal bonds were steady at mid-session, traders said, with yields on all maturities unchanged in secondary activity.
In the primary market, several new deals were priced, led by sales in New York, Arizona.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged at 1.71% from Tuesday, while the 30-year muni yield remained at 2.77%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were higher on Thursday. The yield on the two-year Treasury slipped to 0.72% from 0.75% on Wednesday, while the 10-year Treasury yield fell to 1.70% from 1.74% and the 30-year Treasury bond yield decreased to 2.57% from 2.58%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 98.4% compared to 98.1% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.7% versus 107.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,737 trades on Wednesday on volume of $12.50 billion.
Primary Market
The last of the week's major deals are on the calendar for Thursday.
In the competitive sector, the New York City Municipal Water Finance Authority sold $191.57 million of water and sewer system revenue bonds.
Citigroup won the deal with a true interest cost of 3.15%. The issue was priced as 5s to yield 2.15% in 2028, as 4 1/2s to yield 2.53% in 2032 and as 3s to yield 3.20% in 2036.
The bonds are rated Aa1 by Moody's Investors Service, AAA by Standard & Poor's and AA-plus by Fitch Ratings.
Citi priced the University of Arizona Board of Regents System's $169.69 million of Series 2016 revenue refunding bonds. The issue was priced as 5s to yield from 0.79% in 2019 to 2.95% in 2039. The deal is rated Aa2 by Moody's and AA-minus by S&P.
The University of Arizona said it is taking advantage of the continuing low interest rates with an advanced refunding of bonds issued from 2007 to 2009.
RBC managing director Kurt Freund, UA's financial advisor, said the university estimates net present value savings will be in the range of $17 million to $19 million, or 9.2% to 10.6% of the par amount of bonds expected to be refinanced.
RBC Capital Market received the written award for the Maryland Economic Development Corp.'s $133.595 million of student housing refunding revenue bonds for the University of Maryland at College Park Projects. The bonds were priced to yield from 0.61% with a 4% coupon in 2017 to 2.92% with a 5% coupon in 2031. Term bonds in 2035 and 2043 were priced to yield 3.12% and 3.43%, respectively, both with 5% coupons. The entire deal is backed by Assured Guaranty and is rated A2 by Moody's and AA by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.42 million to $5.71 billion on Thursday. The total is comprised of $2.08 billion of competitive sales and $3.63 billion of negotiated deals.
Tax-Exempt Money Market Funds Post Inflows
Tax-exempt money market funds experienced inflows of $619.9 million, bringing total net assets to $243.46 billion in the week ended Feb. 22, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $3.40 billion to $242.84 billion in the previous week.
The average, seven-day simple yield for the 354 weekly reporting tax-exempt funds remained at 0.01% for the 147th straight week.
The total net assets of the 945 weekly reporting taxable money funds increased $34.79 billion to $2.556 trillion in the week ended Feb. 23, after an inflow of $3.30 billion to $2.521 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.10% for the third week in a row.
Overall, the combined total net assets of the 1,299 weekly reporting money funds rose $35.41 billion to $2.799 trillion in the period ended Feb. 23, which followed an outflow of $96.7 million to $2.764 trillion.
Richard Williamson contributed to this report
