Top-rated municipals bonds finished mixed on Thursday, traders said, as several big deals from California issuers were closing out the week’s new issue slate.

Primary market
Citigroup priced the Metropolitan Water District of Southern California’s $181.65 million of Series 2017B fixed-rate subordinate water revenue bonds.

The bonds were priced to yield from 1.05% with 3% and 5% coupons in a split 2020 maturity to 1.49% with 4% and 5% coupons in a split 2024 maturity.

The deal is rated AA-plus by S&P Global Ratings and Fitch Ratings.

Separately, Wells Fargo Securities priced the Met Waters’ $95.65 million of Series 2017E subordinate water revenue refunding bonds in SIFMA-Index mode.

The issue was priced to yield at a spread of five basis points above the SIFMA Index in 2037 with a mandatory tender in 2018.

The deal is rated A1-plus by S&P and F1-Plus by Fitch.

“Both deals were oversubscribed by about two times and will result in a reduction in annual debt service of approximately $8 million annually,” said Gary Breaux, CFO and assistant general manager at Met Water.

In other action, Bank of America Merrill Lynch as senior manager received the written award on the city of Los Angeles, Calif.’s $949.06 million of 2017 tax and revenue anticipation notes.

The city and BAML agreed to a direct purchase with an affiliate of the lead manager for $500 million of the deal.

The TRANs were priced as 5s to yield 0.93% in 2018.

The deal is rated MIG1 by Moody’s Investors Service and SP1-plus by S&P.

In the competitive arena, the city and county of San Francisco, Calif., sold $397.05 million of Series 2017B certificates of participation for the Moscone Convention Center expansion project.

BAML won the bonds with a true interest cost of 3.33%. The issue was priced to yield from 1.06% with a 5% coupon in 2019 to 3.28% with a 4% coupon in 2038; a 2042 maturity was priced as 4s to yield 3.44%.

The deal is rated Aa2 by Moody’s and AA by S&P and Fitch.

Since 2007 San Francisco has sold roughly $5.28 billion of securities, with the highest issuance in 2012 when it sold $663 million.

The issuance was lowest in 2007 when it sold $154 million. With Thursday’s sale, San Francisco has surpassed last year’s issuance total.

Secondary market
The yield on the 10-year benchmark muni general obligation finished unchanged from 1.86% on Wednesday, while the 30-year GO yield fell one basis point to 2.69% from 2.70%, according to the final read of Municipal Market Data's triple-A scale.

Treasuries were little changed on Thursday. The yield on the two-year Treasury dipped to 1.34% from 1.35% on Wednesday, the 10-year Treasury yield was flat from 2.15% and the yield on the 30-year Treasury bond was unchanged from 2.72%.

The 10-year muni to Treasury ratio was calculated at 86.6% on Thursday, compared with 86.3% on Wednesday, while the 30-year muni to Treasury ratio stood at 98.9% versus 99.2%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 42,537 trades on Wednesday on volume of $15.52 billion.

Tax-exempt money market funds see inflows
Tax-exempt money market funds experienced inflows of $41.9 million, bringing total net assets to $129.71 billion in the week ended June 19, according to The Money Fund Report, a service of iMoneyNet.com.

This followed an outflow of $764.1 million to $129.67 billion in the previous week.

The average, seven-day simple yield for the 232 weekly reporting tax-exempt funds jumped to 0.34% from 0.30% in the previous week.

The total net assets of the 851 weekly reporting taxable money funds decreased $39.28 billion to $2.457 trillion in the week ended June 20, after an outflow of $5.24 billion to $2.496 trillion the week before.

The average, seven-day simple yield for the taxable money funds increased to 0.57% from 0.49% in the prior week.

Overall, the combined total net assets of the 1,083 weekly reporting money funds decreased $39.24 billion to $2.586 trillion in the week ended June 20, after outflows of $6.01 billion to $2.626 trillion in the prior week.

Jacob Schneider contributed to this report.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.