Prices of top shelf municipal bonds were steady at midday, traders said as they look ahead to the upcoming week’s new issue calendar.
Total volume for next week is estimated by Ipreo at about $6.13 billion, consisting of $4.11 billion of negotiated deals and $2.02 billion of competitive sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation was flat from 1.59% on Thursday, while the 30-year muni yield was unchanged from 2.54%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were lower on Friday. The yield on the two-year Treasury inched up to 0.71% from 0.70% on Thursday, while the 10-year Treasury yield rose to 1.72% from 1.69% and the 30-year Treasury bond yield increased to 2.56% from 2.51%.
The 10-year muni to Treasury ratio was calculated at 94.3% on Thursday compared with 93.0% on Wednesday, while the 30-year muni to Treasury ratio stood at 101.2% versus 101.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,960 trades on Thursday on volume of $12.77 billion.
The Week's Most Actively Quoted Issues
Puerto Rico and California issues were among some of the most actively quoted names in the week ended April 8, according to data released from Markit.
On the bid side, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 17 unique dealers. On the ask side, the California State University revenue 4s of 2034 were quoted by 21 unique dealers. And among two-sided quotes, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 20 dealers.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended April 1 were in Puerto Rico, Texas and Florida,
In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 traded 53 times. In the revenue bond sector, the Tarrant County, Texas, Cultural Education Facilities Financing Corp. 4s of 2042 traded 71 times. And in the taxable bond sector, the Florida State Board pf Administration Finance Corp. 2.638s of 2021 traded 22 times, Markit said.
Primary Market
The municipal bond market saw a lot of big deals hit the screens this week.
Wells Fargo Securities priced the Regents of the University of California’s $813.12 million of general revenue bonds. The issue consisted of Series AR and AT tax-exempt bonds and Series AS and AU taxable bonds. The bonds are rated Aa2 by Moody’s Investors Service and AA by Standard & Poor’s and Fitch Ratings.
Wells priced the Los Angeles Department of Water and Power’s $628.52 million of Series 2016A water system revenue bonds. The deal was upsized from the originally expected $550 million. The bonds are rated Aa2 by Moody’s, AA-plus by S&P and AA by Fitch.
Goldman Sachs priced the Dormitory of the State of New York’s $389.71 million of Series 2016 Columbia University revenue bonds. The issue is rated triple-A by Moody’s and S&P.
Morgan Stanley priced and repriced DASNY’s $146.66 million of Series 2016A revenue bonds for Fordham University. The bonds are rated A2 by Moody’s and A by S&P.
Jefferies priced the University of Connecticut's $342.35 million of general obligation bonds. The issue is rated Aa3 Moody's, AA by Standard & Poor's and AA-minus by Fitch.
Citigroup priced the Tarrant County, Texas, Cultural Education Facilities Corp.'s $377.09 million of tax-exempt hospital revenue bonds for Baylor Scott & White Health. The deal was part of a $912 million issue which also consists of $540 million of taxable corporate CUSIP bonds. The bonds are rated Aa3 by Moody's and AA-minus by S&P. The issue carries stable outlooks from rating agencies.
JPMorgan Securities priced Fairfax County, Va.'s $131.47 million of Series 2016A sewer revenue refunding bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
Citigroup priced Lubbock, Texas' $124.6 million of Series 2016 GO refunding bonds and tax and waterworks system surplus revenue certificates of obligation. The deal is rated Aa2 by Moody's and AA-plus by S&P and Fitch.
In the competitive arena, the city and county of San Francisco, Calif., sold $178.96 million of Series 2016C, D and E general obligation various purpose bonds. Citigroup won the bonds with a true interest cost of 2.57%. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The Florida Department of Transportation sold $161.77 million of Series 2016A full faith and credit right of way acquisition and bridge construction refunding bonds. Morgan Stanley won the deal with a TIC of 2.41%. The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
Elk Grove, Calif., sold $106.8 million of Series 2016 capital facilities project certificates of participation. Mesirow Financial won the issue with a TIC of 3.11%. The COPs, which are insured by Build America Mutual, are rated AA by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $299.0 million to $9.27 billion on Friday. The total is comprised of $3.26 billion of competitive sales and $6.01 billion of negotiated deals.
Muni Bond Funds See Inflows for 27th Straight Week
For the 27th week in a row, municipal bond funds reported inflows, according to Lipper data released Thursday.
Weekly reporting funds saw $505.885 million of inflows in the week ended April 6, after inflows of $783.896 million in the previous week, Lipper said. The four-week moving average remained positive at $742.822 million after being in the green at $745.914 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced inflows, gaining $424.721 million in the latest week after inflows of $519.825 million in the previous week. Intermediate-term funds had inflows of $205.411 million after inflows of $205.746 million in the prior week.
National funds had inflows of $391.385 million on top of inflows of $652.906 million in the previous week. High-yield muni funds reported inflows of $16.846 million in the latest reporting week, after inflows of $268.113 million the previous week.
However, exchange traded funds saw outflows of $135.237 million, after inflows of $86.080 million in the previous week.
