Municipal bonds were mostly weaker at midday as buyers will be seeing the last of the week’s sizable new issues come to market.

Primary market
Morgan Stanley is set to price the Southeast Alabama Gas Supply District gas supply revenue bonds for Project No. 2.

In the competitive arena, the New Mexico Finance Authority sold $423.745 million of Series 2018A state transportation refunding revenue bonds.

Goldman Sachs won the bonds with a true interest cost of 2.4967%.

The Orange County Unified School District, Calif., was set to sell $188 million of Election of 2017 Series 2018 general obligation bonds Thursday afternoon.

Thursday’s bond sales

New Mexico:
Click here for the NMFA sale

Bond Buyer 30-day visible supply at $7.91B
The Bond Buyer's 30-day visible supply calendar decreased $2.42 billion to $7.91 billion on Thursday. The total is comprised of $4.38 billion of competitive sales and $3.53 billion of negotiated deals.

ICI: Long-term muni funds see $661M inflow
Long-term municipal bond funds saw an inflow of $661 million in the week ended May 30, the Investment Company Institute reported on Thursday.

This followed an inflow of $185 million into the tax-exempt mutual funds in the week ended May 23 and an inflow of $450 million in the week ended May 16. In the two weeks prior to that, the funds saw an inflow of $352 million and an outflow of $163 million.

Taxable bond funds saw an estimated inflow of $1.58 billion in the latest reporting week, after seeing an inflow of $5.02 billion in the previous week.

ICI said the total estimated outflows to long-term mutual funds and exchange-traded funds were $329 million for the week ended May 30 after outflows of $240 million in the prior week.

Tax-exempt money market funds saw outflows
Tax-exempt money market funds experienced outflows of $389.8 million, lowering their total net assets to $139.65 billion in the week ended June 5, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $590.0 million on to a yearly high of $140.04 billion in the previous week.

The average, seven-day simple yield for the 202 weekly reporting tax-exempt funds fell to 0.66% from 0.80% the previous week.

The total net assets of the 830 weekly reporting taxable money funds gained to $35.04 billion to $2.692 trillion in the week ended June 4, after an inflow of $3.66 billion to $2.657 trillion the week before.

The average, seven-day simple yield for the taxable money funds increased to 1.42% from 1.40% from the prior week.

Overall, the combined total net assets of the 1,032 weekly reporting money funds increased $34.65 billion to $2.832 trillion in the week ended June 4, after inflows of $4.25 billion to $2.797 trillion in the prior week.

Secondary market
Municipal bonds were mostly weaker on Thursday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields rose as much as one basis point in the seven- to 30-year maturities and fell by as much as one basis point in the one- to six-year maturities.

High-grade munis were mostly weaker, with yields calculated on MBIS’ AAA scale rising as much as one basis point in the seven- to 30-year maturities and falling as much as one basis point in the one- to six-year maturities.

Municipals were weaker on Municipal Market Data’s AAA benchmark scale, which showed yields rising as much as one basis point in the 10-year general obligation muni and gaining as much as one basis point in the 30-year muni maturity.

Treasury bonds were weaker as stock prices traded mixed.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 82.7% while the 30-year muni-to-Treasury ratio stood at 95.2%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Previous session's activity
The Municipal Securities Rulemaking Board reported 44,817 trades on Wednesday on volume of $18.74 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 17.89% of the market, the Empire State taking 11.29% and the Lone Star State taking 9.356%.

Treasury announces auction details
The Treasury Department announced these auctions:

  • $14 billion of 29-year 11-month 3 1/8% bonds selling on June 12;
  • $22 billion of nine-year 11-month 2 7/8% notes selling on June 11;
  • $32 billion of three-year notes selling on June 11;
  • $42 billion of 182-day bills selling on June 11; and
  • $48 billion of 91-day bills selling on June 11.

Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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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.