Municipal bond issuance will come from across the county in the coming week, as deals from issuers in California, Texas, Hawaii and Florida are scheduled to hit screens after traders return from the Good Friday long weekend.
Munis ended the past holiday shortened week quietly, as all maturities were unchanged Thursday, according to traders.
Primary Market
Municipal volume for the week ahead is estimated by Ipreo at $6.1 billion, up from a revised total of $3.6 billion sold in the past week, according to Thomson Reuters. The calendar consists of about $4.4 billion of negotiated deals and $1.7 billion of competitive sales.
Barclays Capital is expected to price the largest deal of the week, a $1.4 billion offering from the Trustees of the California State University. The system wide revenue bonds are scheduled to price on Wednesday after a one day retail order period. The deal is rated Aa2 by Moody’s Investors Service.
JPMorgan is set to price the Houston Independent School District’s $683.6 million of limited tax schoolhouse and refunding bonds on Tuesday. The deal is expected to mature serially from 2017 through 2041 and is rated triple-A by Moody’s and Standard & Poor’s.
The state of Hawaii is once again saying aloha to the bond market. A few weeks after selling the first competitive bond sale in more than 20 years, Hawaii will be back, this time with a negotiated offering. Bank of America Merrill Lynch is scheduled to price $325 million of general obligation bonds, which include two tax-exempt series’ and one taxable series. The deal is expected to price on Thursday and is rated Aa2 by Moody’s and AA by both S&P and Fitch Ratings.
The biggest individual sale in the competitive arena will be a $154.665 million offering from the Central Florida Expressway Authority. The sale is scheduled to take place on Tuesday and the senior lien refunding revenue bonds are rated A3 by Moody’s and A by S&P and Fitch.
“Overall it looks like a slow new issue week,” said Alan Schankel, municipal strategist at Janney. “It is interesting that Central Florida Expressway (Orlando area) will sell competitively, as you don’t see that often with toll revenue issues, but this has been a good year for toll revs given lower gas prices and stable to slightly improving economy.”
Secondary Trading
Top quality municipal bonds finished flat on Thursday, traders said, as the municipal bond market saw an abbreviated trading session ahead of a full market close on Friday.
The yield on the 10-year benchmark muni general obligation was steady from 1.82% on Wednesday, while the 30-year muni yield was unchanged from 2.76%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mostly weaker on Thursday. The yield on the two-year Treasury rose to 0.87% from 0.85% on Wednesday, while the 10-year Treasury yield increased to 1.89% from 1.88% and the 30-year Treasury bond yield was flat from 2.66%.
The 10-year muni to Treasury ratio was calculated on Thursday at 96.3% compared with 97.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 103.8% versus 104.1%, according to MMD.
The Week's Most Actively Quoted Issues
California and New York issues were among some of the most actively quoted names in the week ended March 24, according to data released on Thursday by Markit.
On the bid side, the California taxable 7.55s of 2039 were quoted by 10 unique dealers. On the ask side, the New York City Transitional Finance Authority revenue 4s of 2036 were quoted by 17 unique dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 15 dealers.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended March 24 were in Connecticut and Tennessee, according to
In the GO bond sector, the Connecticut 4s of 2036 traded 105 times. In the revenue bond sector, the Nashville and Davidson Health and Educational Facilities Board 5s of 2046 traded 134 times. And in the taxable bond sector, the Nashville and Davidson Health and Educational Facilities Board 4.053s of 2026 traded 157 times, Markit said.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $3.55 billion, bringing total net assets to $233.17 billion in the week ended March 21, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $3.09 million to $236.72 billion in the previous week.
The average, seven-day simple yield for the 353 weekly reporting tax-exempt funds remained at 0.01% for the 151st straight week.
The total net assets of the 940 weekly reporting taxable money funds increased $2.59 billion to $2.549 trillion in the week ended March 22, after an outflow of $43.55 billion to $2.547 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds was unchanged at 0.11%.
Overall, the combined total net assets of the 1,293 weekly reporting money funds decreased $961.6 million to $2.782 trillion in the period ended March 22, which followed an outflow of $46.64 billion to $2.783 trillion.
