Municipal bonds were stronger at mid-session, according to traders, as yields on some top-shelf maturities weakened by as much as five basis points.
The market is digesting this week's hefty volume as it looks ahead of next week's $2.1 billion of new issues. Next week's calendar consists of $1.51 billion of negotiated deals and $564.2 million of competitive sales, according to data compiled by Ipreo.
Secondary Market
The yield on the 10-year benchmark muni general obligation was three to five basis points weaker from 1.97% on Thursday, while the 30-year yield was from three to five basis points weaker from 2.85%, according to an early read of Municipal Market Data's triple-A scale.
U.S. Treasury bonds were stronger as the yield on the two-year decreased to 0.91% from 0.95% on Thursday while the 10-year yield dropped to 2.17% from 2.23% and the 30-year Treasury decreased to 2.90% from 2.97%.
The 10-year muni to Treasury ratio was calculated on Thursday at 88.1% compared to 89.3% on Wednesday, while the 30-year muni to Treasury ratio stood at 95.8% compared to 97.6%, according to MMD.
The Week's Most Actively Quoted Issues
New York & New Jersey, California, and Puerto Rico were some of the most actively quoted names in the week ended Dec. 11, according to data released by Markit.
On the bid side, the New York & New Jersey Port Authority taxable 4.81s of 2065 were quoted by 17 unique dealers. On the ask side, the California taxable 7.55s of 2039 were quoted by 15 unique dealers. And among two-sided quotes, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 13 dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Dec. 11 were in South Carolina, California, and New York and New Jersey, according to Markit.
In the revenue bond sector, the South Carolina state public Service Authority 5 1/4s of 2055 were traded 95 times. In the GO bond sector, the California 5s of 2026 were traded 31 times. And in the taxable bond sector, the New York & New Jersey Port Authority taxable 4.81s of 2065 were traded 18 times, Markit said.
Primary Market
More than $7.49 billion of new deals hit the screens this week, according to revised data from Thomson Reuters.
The calendar was topped by the Empire State Development Corp.'s $1.13 billion of personal income tax revenue bonds, which were offered in four separate competitive sales for the New York State Urban Development Corp. All sales were rated Aa1 by Moody's Investors Service and triple-A by Standard & Poor's.
The ESDC's Group 2015A Group B bonds were won by Bank of America Merrill Lynch with a true interest cost of 3.34%. The Group 2015A Group A bonds were won by Wells Fargo Securities with a TIC of 1.83%. The Group 2015B taxable bonds were won by JP Morgan Securities with a true interest cost of 1.78%. The 2015A Group C bonds were won by Jefferies with a TIC of 3.98%.
Also in the competitive sector, South Carolina's Clemson University sold two issues totaling $210.8 million. Both sales were rated Aa2 by Moody's and AA by Fitch. Citigroup won the $191 million of Series 2015B higher education revenue bonds with a true interest cost of 3.37%. Citi also won the $19.8 million of Series 2015B athletic facilities revenue bonds with a TIC of 3.33%.
King County, Wash., sold $172.32 million of Series 2015E limited tax general obligation refunding bonds. JPMorgan won the bonds with a TIC of 2.89%. The issue was rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
Las Vegas, Nev., sold $164.43 million of Series 2015C GOLT city hall bonds, additionally secured by pledged revenues. JP Morgan won the bidding with a TIC of 3.28%. The issue was rated Aa1 by Moody's and AA by S&P.
In the negotiated sector, Citigroup priced the Indiana Power Agency's $366.35 million Series 2016A power supply system refunding revenue bonds. The issue was rated A1 by Moody's and A-plus by S&P and Fitch.
RBC priced the Illinois State Toll Highway Authority's $333 million of Series 2016A toll highway senior revenue refunding bonds. The issue was rated Aa2 by Moody's and AA-minus by S&P and Fitch. The authority said the sale refunded $350 million of its Series 2008B bonds.
"Refinancing these bonds at this time allowed us to use the Tollway's strong financial position to achieve significant savings that we can reinvest in infrastructure improvement projects to help ensure our customers have a safe, convenient trip every time they use our roadways," Tollway Executive Director Greg Bedalov said in a press release.
This was the authority's fourth issuance of refunding bonds since 2013. With these issues the authority has refunded most of its outstanding Series 2005A, 2006A and 2008B bonds. In total, the four issues refunded $1.3 billion of Series 2005A, 2006A and 2008B bonds, producing net present value savings of $141.2 million, or 10.8%, of the amount of bonds refunded.
RBC Capital Markets priced the Metropolitan Water District of Southern California's $208.26 million of Series 2015 water revenue bonds. The deal was rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
Wells Fargo Securities priced the Water Replenishment District of Southern California Financing Authority's $148.35 million of Series 2015 replenishment assessment revenue bonds. The bonds were rated AA-plus by S&P and Fitch.
Wells Fargo priced New York City Housing Development Corp.'s $197.33 million of Series H&I multi-family housing revenue sustainable neighborhood bonds. This issue is rated Aa2 by Moody's and AA-plus by S&P. JPMorgan priced the HDC's $176.5 million of Series 2015 G fixed-rate multi-family housing revenue sustainable neighborhood bonds. The issue was also rated Aa2 by Moody's and AA-plus by S&P.
BAML priced the New York Metropolitan Transportation Authority's $318.92 million of Series 2015F revenue refunding bonds. The deal was rated A1 by Moody's, AA-minus by S&P, A by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
RBC priced the Park Creek Metropolitan District, Colo.'s $231.17 million of Series 2015A senior limited property tax supported revenue refunding bonds. The bonds were rated triple-B by Fitch.
Bank of America Merrill Lynch priced the city of Columbus, Ohio's $155.61 million of Series 2015 sewerage system revenue refunding bonds. The bonds were rated Aa1 by Moody's and AA-plus by S&P.
BAML priced South Carolina Public Service Authority's $300 million of Series E revenue obligation bonds. The deal was rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Raymond James & Associates priced the Metropolitan Nashville Airport Authority, Tenn.'s $197 million of airport improvement revenue bonds, Series 2015A non-alternative minimum tax bonds and Series 2015B AMT bonds. The issue was rated A1 by Moody's and A-plus by S&P.
Wells Fargo priced the Municipal Electric Authority of Georgia's $168.93 million bond deal, consisting of $1.72 million of Series HH power revenue bonds, $148.82 million of Series 2015A Project One subordinated bonds, $10.03 million of Series 2015A Project One subordinated capital appreciation bonds, and $8.36 million of Series 2015A general resolution projects subordinated bonds. MEAG's power revenue bonds are rated A1 by Moody's and A-plus by S&P and Fitch, while the Project One and general resolution subordinates are rated A2 by Moody's, A by S&P and A-plus by Fitch.
Siebert Brandford Shank & Co. priced the city of Shreveport, La.'s $120 million of Series 2015 water and sewer system revenue and refunding bonds. Assured Guaranty Municipal insured the 2026-2035 maturities, totaling $60.57 million. The insured maturities were rated A2 by Moody's and AA by S&P, while the uninsured maturities were rated A3 by Moody's and BBB-plus by S&P.
Morgan Stanley priced the New Jersey Health Care Facilities Financing Authority's $258.25 million of Series 2015A revenue and refunding bonds, University Hospital issue. The issue was insured by AGM and rated A2 by Moody's and AA by S&P; it carries an underlying rating of triple-B from Fitch.
Municipal Bond Funds See Inflows for 10 Straight Weeks
Municipal bond funds reported inflows for the 10th straight week, according to Lipper data released on Thursday.
Weekly reporting funds experienced $741.968 million of inflows in the week ended Dec. 9, after inflows of $364.051 million in the previous week.
The latest inflow brings to 29 out of 50 weeks this year that the funds have seen cash flowing in. Flows for the year to date remain positive, totaling over $4.5 billion.
The four-week moving average remained positive at $543.721 million after being in the green at $440.603 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 $249.348 million in the latest week, on top of inflows of $111.303 million in the previous week. Intermediate-term funds had inflows of $357.572 million after inflows of $290.874 million in the prior week.
National funds saw inflows of $734.578 million after inflows of $373.795 million in the prior week. High-yield muni funds reported inflows of $203.227 million in the latest reporting week, after an inflow of $122.236 million the previous week.
Exchange traded funds saw inflows of $121.669 million, after inflows of $33.226 million in the previous week.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,427 trades on Thursday on volume of $10.75 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.25 billion to $3.89 billion on Friday. The total is comprised of $645.8 million competitive sales and $3.25 billion of negotiated deals.
