Top quality municipal bonds were mixed at midday, traders said, with yields on short maturities moving higher, intermediates remaining steady and longer terms declining.
In the primary market, Ramirez & Co. priced the New York City Transitional Finance Authority’s $750 million bond deal for retail investors.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.88% on Tuesday, while the 30-year muni yield was as much as one basis point weaker from 2.86%, according to a read of Municipal Market Data's triple-A scale. Short maturities were as much as two basis points stronger.
Treasuries were narrowly mixed on Thursday. The yield on the two-year Treasury rose to 0.93% from 0.90% on Wednesday, while the 10-year Treasury yield was unchanged from 1.89% and the 30-year Treasury bond yield was flat at 2.67%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 99.4% compared to 102.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.5% versus 108.5%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,320 trades on Wednesday on volume of $10.64 billion.
Primary Market
Ramirez priced for retail the NYC TFA’s building aid revenue bonds, fiscal 2016 Series S-1. After a two-day retail order period, the deal will be priced for institutions on Monday.
The issue was priced for retail to yield from 0.96% with a 3% coupon in 2019 to 3.21% with a 4% coupon in 2036; a 2045 maturity was priced as 4s to yield 3.45%. No orders were taken in the 2028-2030, 2032, 2034-2035, 2040 or 2044 maturities. The 2017 and 2018 maturities were offered as sealed bids.
The deal is rated Aa2 by Moody’s Investors Service and AA Standard & Poor’s and Fitch Ratings.
Citigroup priced the Las Vegas Valley Water District, Nev.’s $497.635 million of general obligation improvement and refunding limited tax bonds. The bonds were priced to yield from 0.80% with a 3% coupon in 2018 to 3.07% with a 5% coupon in 2038. Term bonds in 2041 and 2046 were priced to yield 3.18% and 3.24%, respectively, each with a 5% coupon. The 2017 maturity was offered as a sealed bid. The deal is rated Aa1 by Moody’s and AA by S&P.
Since 2006, the Las Vegas Valley Water District has issued bonds an average of two times a year, selling about $3.7 billion, with the largest issuances in 2009 and 2011 when it offered $520 million and $534 million, respectively. The LVVWD did not issue any bonds in 2007 or 2013.
Morgan Stanley is expected to price the Louisiana Public Facilities Authority’s $198.68 million of refunding revenue bonds for the Energy Louisiana Project. The deal is rated A2 by Moody’s and A-minus by S&P.
Mesirow Financial is set to price Sweetwater Union High School, Calif.’s $264.5 million of GOs. The deal is rated A1 by Moody’s A-plus by S&P and AAA by Fitch Ratings.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $2.52 billion to $7.56 billion on Thursday. The total is comprised of $2.46 billion of competitive sales and $5.10 billion of negotiated deals.
Tax-Exempt Money Market Funds Post Inflows
Tax-exempt money market funds experienced inflows of $831.8 million, bringing total net assets to $239.81 billion in the week ended March 7, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $4.49 billion to $238.97 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 149th straight week.
The total net assets of the 940 weekly reporting taxable money funds increased $24.99 billion to $2.590 trillion in the week ended March 8, after an inflow of $9.30 billion to $2.565 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.10% for the fifth week in a row.
Overall, the combined total net assets of the 1,294 weekly reporting money funds increased $25.82 billion to $2.830 trillion in the period ended March 8, which followed an inflow of $4.81 billion to $2.804 trillion.
