Prices of top-rated municipal bonds were unchanged at mid-session, traders said, as the market looks ahead to an almost $9 billion slate of new bonds for next week, topped off by several big deals from Far West issuers.
Secondary Market
Prices of top-quality munis were steady at midday. The yield on the 10-year benchmark muni general obligation was unchanged from 1.94% on Thursday, while the yield on the 30-year GO remained at 2.83%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Friday as the yield on the two-year Treasury note rose to 0.51% from 0.48% on Thursday, while the 10-year yield was unchanged at 1.89% and the 30-year yield decreased to 2.55% from 2.56%.
The 10-year muni to Treasury ratio was calculated on Thursday at 103.3% versus 102.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 110.7% compared to 110.3%.
Primary Market
Municipal bonds scheduled for sale next week are estimated to total $8.7 billion, according to Ipreo and The Bond Buyer. This is up from a revised $7.9 billion this week, according to Thomson Reuters.
There are $6.2 billion of negotiated deals slated for next week and $2.5 billion of competitive sales.
Leading off the calendar are three separate competitive offerings from California totaling $1.1 billion. The sales, slated for next Tuesday, consist of $592.7 million of tax-exempt various purpose general obligation refunding bonds, Bid Group C; $403.5 million of tax-exempt various purpose GO refunding bonds, Bid Group B; and $105.36 million of taxable various purpose GO, Bid Group A. The bonds are rated Aa3 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch Ratings.
Also slated for next week, is a $888 million negotiated deal for Washington's Energy Northwest. JPMorgan is slated to price the tax-exempt and taxable bonds on Thursday in six series, consisting of $101.32 million of Series 2015-A Project 1 electric revenue refunding bonds; $314.63 million of Series 2014-A Columbia generating station electric revenue and refunding bonds; $74.29 million of Series 2014-A revenue refunding bonds; $25.43 million of Series 2015B Project 1 taxable electric revenue refunding bonds; $332.96 million of Series 2015-B Columbia generating station taxable electric revenue and refunding bonds; and $39.23 million of Series 2015-B taxable revenue refunding bonds. The issue is rated Aa1 by Moody's, AA-minus by S&P and AA by Fitch.
And Phoenix, Ariz., is scheduled to come to market with $391 million of tax-exempt and taxable Series 2 civic improvement subordinated excise tax revenue refunding bonds, Wells Fargo Securities is slated to price the issue on Tuesday. The issue is rated Aa3 by Moody's and AA-plus by S&P.
On Thursday, Loop Capital Markets priced the New York City Transitional Finance Authority's $650 million of Fiscal 2015 Subseries E-1 future tax secured subordinate bonds after a holding a two-day order period for retail investors. The bonds were rated Aa1 by Moody's Investors Service and triple-A by Standard & Poor's and Fitch Ratings.
Additionally on Thursday, the TFA competitively sold $200 million of Fiscal 2015 Series E Subseries E-2 future tax secured taxable subordinate bonds. The deal was won by Stifel with a true interest cost of 3.0201%. The taxables were also rated Aa1 by Moody's and triple-A by S&P and Fitch.
The TFA said it received about $140 million of retail orders and around $606 million of priority orders from institutional investors for the $492 million of bonds left to sell. The TFA also said it received 10 bids for the sale of the $200 million of taxable new money bonds.
On April 22, the TFA will offer $190 million of tax-exempt new money variable-rate demand bonds, bringing the total sale amount to $1.04 billion.
The Week's Most Actively Quoted Issues
Chicago and California names were among the most actively quoted issues in the week ended April 17, according to data released by Markit.
On the bid side, the Chicago 5.432s of 2042 were quoted by 10 unique dealers. On the ask side, the California State Tobacco Securitization Corp. 5s of 2045 were quoted by 14 dealers. And among two-sided quotes, the California 7.55s of 2039 were quoted by 10 dealers, Markit said. The Week's Most Actively Traded Issues
Among the most actively traded issues in the week ended April 17, were issuers from New York and New Jersey and West Virginia, according to Markit.
In the revenue bond sector, the Monongalia Co., W.Va., 4s of 2035 were traded 48 times. In the GO bond sector, the Port Authority of New York & New Jersey 3 1/4s of 2033 were traded 48 times. And in the taxable bond sector, the Port Authority of New York & New Jersey 2 1/2s of 2022 were traded 18 times, according to Markit.
Tax-Exempt Bond Funds See Outflow
Municipal bond funds which report weekly, posted $486.312 million of outflows in the week ended April 15, after experiencing outflows of $32.810 million in the week ended April 8, according to the latest Lipper data.
The four-week moving average turned negative at $59.509 million in the latest week after being positive at $95.488 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds saw inflows, gaining $237.634 million in the latest week, after experiencing inflows of $227.106 million in the previous week.
High-yield muni funds recorded an inflow of $49.576 million in the latest reporting week, after seeing inflows of $129.963 million in the previous week. Exchange-traded funds had inflows of $126.797 million, after recording inflows of $96.832 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $187 million of outflows in the week ended April 8, according to the Investment Company Institute. ICI reported inflows into long-term funds of $96 million in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.602 billion to $11.832 billion on Friday. The total is comprised of $3.859 billion competitive sales and $7.973 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 44,283 trades on Thursday on volume of $14.410 billion.
The most active bond, based on the number of trades, was the Chicago Series 2012B taxable GO project and refunding 5.432s of 2042, which traded 231 times at an average price of 87.817 with an average yield of 6.388%. The bonds were initially priced at par to yield 5.432%.
