Top-rated municipal bonds were unchanged in quiet activity on Friday, traders said, as the market slowly wound down during a holiday-shortened trading session.
The U.S. bond markets will close early on Friday ahead of Memorial Day and will remain closed on Monday. Trading will resume on Tuesday.
The only fly in the ointment could be some last-minute news coming from the head of the Federal Reserve.
Fed Chair Janet Yellen is Yellen is speaking at Harvard University just ahead of Friday's 2 p.m., EDT, close. While most Fed watchers do not expect her to talk about monetary policy in her speech, there is a question and answer period following her address where she may give hints as to the Federal Open Market Committee's thinking on rates.
The FOMC next gathers on June 14-15, with a press conference and economic projections to follow the conclusion of their meeting.
In the primary, traders are also looking ahead to next week's new issue calendar, which Ipreo estimates at $4.57 billion, down from total sales of $8.23 billion this week, according to revised data from Thomson Reuters.
There are $3.02 billion of negotiated deals set for next week and $1.55 billion of competitive sales.
Secondary Market
Top-rated municipal bonds were flat in quiet activity on Friday. The yield on 10-year benchmark muni general obligation was steady from 1.66% on Thursday, while the 30-year muni yield was unchanged from 2.45%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker in Friday trading. The yield on the two-year Treasury rose to 0.88% from 0.87% on Wednesday, while the 10-year Treasury yield gained to 1.84% from 1.82% and the yield on the 30-year Treasury bond increased to 2.65% from 2.63%.
The 10-year muni to Treasury ratio was calculated at 91.2% on Thursday compared to 88.8% on Wednesday, while the 30-year muni to Treasury ratio stood at 93.2% versus 91.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,546 trades on Thursday on volume of $12.27billion.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended May 26 were from New York and Virginia issuers, according to data released
In the GO bond sector, New York City 4s of 2033 traded 67 times. In the revenue bond sector, the N.Y. MTA 5s of 2036 traded 55 times. And in the taxable bond sector, the Virginia HAD 3.1s of 2041 traded 21 times, Markit said.
The Week's Most Actively Quoted Issues
California and Puerto Rico issues were among the most actively quoted names in the week ended May 26, according to Markit.
On the bid side, the California taxable 7.5s of 2034 were quoted by 10 unique dealers. On the ask side, the Los Angeles Airport revenue 4s of 2036 were quoted by 16 unique dealers. And among two-sided quotes, the Puerto Rico GO 8s of 2035 were quoted by nine dealers.
Primary Market
The market saw a heft slate of new issues price during the week.
PNC Capital Markets priced the Pennsylvania Turnpike Commission's $643 million of second series of 2016 subordinate revenue refunding bonds. The deal is rated A3 by Moody's Investors Service and A-minus by Fitch Ratings.
JPMorgan Securities priced the San Diego Public Facilities Financing Authority's $566.65 million of Series 2016A and 2016B subordinated water revenue bonds. The bonds, which are payable solely from subordinated installment payments secured by net system revenues of the water utility fund, are rated Aa3 by Moody's and AA-minus by Fitch.
Bank of America Merrill Lynch priced the state of Connecticut's $501.40 million of Series 2016B general obligation refunding bonds. Connecticut's GOs are rated Aa3 by Moody's, AA-minus by S&P Global Ratings and Fitch, and AA by Kroll Bond Rating Agency.
Barclays Capital priced the city of Chicago's $348.36 million of Series 2016A AMT and Series 2016B Non-AMT second lien revenue and revenue refunding bonds for Midway Airport. The bonds are rated A by S&P Global Ratings, Fitch and Kroll Bond Rating Agency.
RBC Capital Markets priced the Massachusetts Educational Financing Authority's $340 million of Series 2016 Issue J education loan revenue bonds, subject to the alternative minimum tax. The deal is rated AA by S&P and A by Fitch.
RBC also priced Miami-Dade County, Fla.'s $335.22 million of GOs for the building better communities program as a remarketing. The bonds are rated Aa2 by Moody's and AA by S&P.
BAML priced the Los Angeles Department of Water and Power's $265.17 million of Series 2016B water system revenue bonds. The deal is rated Aa2 by Moody's Investors Service, AA-plus by S&P Global Ratings and AA by Fitch Ratings.
BAML also priced the Washington Metropolitan Area Transit Authority, D.C.'s $220 million of Series 2016A gross revenue transit bonds. The deal is rated A2 by Moody's and AA-minus by S&P.
Raymond James priced the Frisco Independent School District, Texas' $209.21 million of unlimited tax school building and refunding bonds. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
BAML priced the North East Texas Regional Mobility Authority's $181.35 million of Series 2016A senior lien revenue bonds and Series 2016B subordinate lien revenue bonds. The senior lien bonds are rated Baa2 by Moody's and BBB by S&P; the subordinate lien bonds are rated Baa3 by Moody's and BBB-minus by S&P.
Morgan Stanley priced the Houston Independent School District, Texas' $141.22 million of Series 2014A-1A and Series 2014A-1B variable-rate limited tax schoolhouse bonds as a remarketing.Both series are backed by PSF and rated triple-A by Moody's and S&P.
JPMorgan Securities priced the Harris County, Texas, Cultural Education Facilities Finance Corp.'s $139.28 million of Series 2016A hospital revenue bonds for the Memorial Hermann Health System. The deal is rated A1 by Moody's and A-plus by S&P.
RBC priced the South San Francisco Unified School District, San Mateo County, Calif.'s $129 million of Series 2016C general obligation bonds, dedicated unlimited ad valorem property tax bonds. The bond are rated Aa1 by Moody's and triple-A by Fitch.
JPMorgan Securities priced the New Jersey Healthcare Facilities Finance Authority's $117.77 million of Series 2016A refunding bonds for the Inspira Health Obligated Group. The deal is rated A2 by Moody's and A by Fitch.
In the competitive sector, the Florida Board of Education sold $239.25 million of Series 2016A lottery revenue refunding bonds. JPMorgan won the bonds with a true interest cost of 1.59%. The deal is rated A1 by Moody's, triple-A by S&P and AA by Fitch.
The Brookland Cayce School District No. 2 of Lexington County, S.C., competitively sold $100 million of Series 2016 GOs. Wells Fargo Securities won the deal with a TIC of 2.99%. The deal is backed by the South Carolina School District Credit Enhancement Program and is rated Aa1 by Moody's and AA by S&P.
Denton, Texas, competitively sold $112.19 million of securities in two separate sales. Robert W. Baird won the $83.23 million of Series 2016 certificates of obligation with a TIC of 2.98%. Citigroup won the $28.93 million of Series 2016 GO refunding and improvement bonds with a TIC of 2.34%. Both deals are rated AA-plus by S&P and Fitch.
Fort Worth, Texas, sold $258.53 million of bonds in three separate offerings. Morgan Stanley won the $165.11 million of Series 2016 general purpose refunding and improvement bonds with a TIC of 2.38%. The bonds are rated Aa2 by Moody's and AA-plus by S&P and Fitch. Wells Fargo Securities won the $75.27 million of Series 2016 water and sewer system revenue refunding and improvement bonds with a TIC of 2.81%; the bonds are rated Aa1 by Moody's, AA-plus by S&P and AA by Fitch. Frost Bank won the $17.53 million of Series 2016 drainage utility system revenue refunding bonds with a TIC of 2.48%; the bonds are rated AA-plus by S&P and Fitch.
The Metropolitan Council of the Minneapolis-St. Paul Area in Minnesota competitively sold $164 million of bonds in three separate offerings. Citigroup won the $123.13 million of Series 2016C GO wastewater and refunding bonds with a TIC of 2.28%. Barclays Capital won the $36.17 million of Series 2016A GO transit and refunding bonds with a TIC of 1.31% and Morgan Stanley won the $4.7 million of Series 2016B GO park bonds with a TIC of 0.82%. The bonds are rated triple-A by Moody's and S&P.
The Santa Clara County Financing Authority, Calif., competitively sold $160.85 million of Series 2016Q refunding lease revenue bonds for multiple facilities projects. Morgan Stanley won the bonds with a TIC of 2.84%.The deal is rated AA-plus by S&P and AA by Fitch.
Citi won the Los Angeles County Metropolitan Transportation Authority's $86.57 million of Series 2016A Proposition C sales tax revenue refunding bonds with a TIC of 1.93%. The bonds are rated Aa2 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $2.33 billion to $6.80 billion on Thursday. The total is comprised of $6.48 billion of competitive sales and $4.41 billion of negotiated deals.
Muni Bond Funds See Inflows for 34th Week in a Row
For the 34th straight week, municipal bond funds reported inflows, according to Lipper data released Thursday.
Weekly reporting funds saw $950.449 million of inflows in the week ended May 25, after inflows of $1.245 billion in the previous week, Lipper said.
The four-week moving average remained positive at $1.029 billion after being in the green at $1.085 billion 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 $630.989 million in the latest week after inflows of $738.463 million in the previous week. Intermediate-term funds had inflows of $217.643 million after inflows of $388.056 million in the prior week.
National funds had inflows of $916.041 million on top of inflows of $1.209 billion in the previous week. High-yield muni funds reported inflows of $333.190 million in the latest reporting week, after inflows of $372.212 million the previous week.
Exchange traded funds saw inflows of $110.156 million, after inflows of $200.238 million in the previous week.
