The primary market on Thursday will see the last push of major new issuance for the week, as issuers from Arizona, New York and Texas will be hitting the market.
Secondary Market
Treasuries were narrowly mixed on Thursday. The yield on the two-year Treasury slipped to 0.74% from 0.75% on Wednesday, while the 10-year Treasury yield was flat at 1.74% and the 30-year Treasury bond yield increased to 2.61% from 2.58%.
On Wednesday, the yield on the 10-year benchmark muni general obligation was unchanged at 1.71% from Tuesday, while the 30-year muni yield fell to 2.77% from 2.78%, according to a final read of Municipal Market Data's triple-A scale.
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 will be selling $191.565 million of water and sewer system revenue bonds. The deal is rated triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
Citi is set to price the University of Arizona Board of Regents System's $179 million of revenue bonds. The deal is expected to mature serially from 2019 through 2039 and is rated A2 by Moody's Investors Service and AA-minus by S&P.
The University of Arizona plans to take advantage of continuing low interest rates with an advanced refunding of bonds issued from 2007 to 2009.
RBC Capital Markets 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.
"The University expects the sale will be well received given current market conditions and the fact that the University has not come to market recently and there has been little supply of high credit quality Arizona paper," Freund said. "Expectations are that demand will be strong from both professional retail buyers as well as institutional investors."
BOSC is scheduled to price Allen Independent School District, Texas' $144.95 million of unlimited tax refunding bonds. The deal is rated 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
