Munis were steady on Thursday, as U.S. Treasuries richened slightly and equities ended higher.
Muni yields were changed up to one basis point, depending on the scale. UST yields richened by one to three basis points. The 10-year MMD-UST ratio hit its highest point since March at 73%, and the 30-year ratio hit its highest point since April at 90%.
A strong Wednesday and Thursday for USTs likely helped stabilize munis, which had cheapened every day this week, said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital. Economic data Thursday seemed to quell markets' fears of a large rate hike in September or multiple rate hikes this year, Olsan said; if the nonfarm payroll data released Friday appears soft, USTs could rally further, she added.
Higher muni yields seem to be holding investors' interest, Olsan said.
"The market's just feeling out where the best values are," Olsan said. "I would take it as a positive that there is pretty good follow-through, as opposed to other times like this, where you just get the market at a standstill and almost like a deer-in-headlights reaction."
Fund flows
Investors added $137.9 million into municipal bond mutual funds in the week ended Wednesday, following $1.442 billion of inflows the prior week, according to LSEG Lipper data.
High-yield funds saw inflows of $60.5 million compared to inflows of $302.6 million the previous week.
New-issue market
In the primary market Thursday, BofA priced for the Regents of the University of Michigan (Aaa/AAA//) $826.86 million of general revenue bonds. The first tranche, $576.86 million of Series 2026A bonds, saw 5s of 4/2031 at 3.00%, 5s of 2036 at 3.54%, 5s of 2041 at 4.17% and 5s of 2046 at 4.46%, callable 4/2036, except for the 2031 bonds, which are callable 10/2030.
The second tranche, $250 million of taxable Series 2026B bonds, all priced at par, with 4.748s of 4/2031, callable 1/2031 and 5.101s of 2036, callable 10/2035.
Wells Fargo priced for the National Finance Authority $281.67 million of unrated Bridgeland Water and Utility District special revenue and refunding bonds, with 6.125s of 12/2035 priced at par, callable 12/2027.
