Yields on top-rated municipal bonds dropped further into record low territory on the long end Thursday, according to Municipal Market Data.
The 30-year muni general obligation yield was from three to five basis points weaker from Wednesday's record low of 2.34%, according to a midday read of MMD's triple-A benchmark scale. The yield on 10-year benchmark muni was from two to four basis points weaker from 1.60% on Wednesday, according to MMD.
U.S. Treasuries were stronger on Thursday. The yield on the two-year Treasury dipped to 0.77% from 0.78% on Wednesday, while the 10-year Treasury yield dropped to 1.67% from 1.70% and the yield on the 30-year Treasury bond decreased to 2.47% from 2.51%.
The 10-year muni to Treasury ratio was calculated at 94.0% on Wednesday compared to 94.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 93.2% versus 93.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,857 trades on Wednesday on volume of $16.75 billion.
Primary Market
Massachusetts hit the market with $500 million of general obligation bonds in two separate competitive sales.
JPMorgan Securities won the $450 million of Consolidated Loan of 2016 Series E GOs with a true interest cost of 3.29%. JPMorgan also won the $50 million of Consolidated Loan of 2016 Series D GOs with a TIC of 1.46%. Pricing information was not immediately available.
The deals are rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings. Moody's and Fitch assign stable outlooks while S&P assigns a negative outlook to the credit.
Last week, Gov. Charlie Baker and state Treasurer Deborah Goldberg visited the rating agencies in New York to speak with them about the sale.
"We place a heavy emphasis on the maintenance of our ratings," Goldberg said.
Since 2006, Massachusetts has issued about $26.4 billion of debt, with the largest issuance occurring in 2014 when it sold $3.6 billion of securities. The Bay State has sold more than $2 billion a year every year since 2006, except in 2008, 2011 and 2012. With the year not nearing its mid-point, it appears the state will get surpass that mark again.
Also on the competitive slate, South Broward Hospital District, Fla., sold $168.03 million of Series 2016 hospital refunding revenue bonds.
PNC Capital Markets won the bonds with a TIC of 2.89%. Pricing information was not immediately available. The deal is rated Aa3 by Moody's and AA by S&P.
In the negotiated sector, Loop Capital Markets priced Harris County, Texas' $513.92 million of Series 2016A toll road senior lien revenue refunding bonds.
The issue was priced to yield 0.99% with a 5% coupon in 2019 and from 1.30% with 2.75% and 5% coupons in a split 2021 maturity to 2.52% with a 5% coupon in 2036. A term bond in 2041 was priced to yield 2.59% with a 5% coupon and a term bond in 2047 was priced to yield 2.64% with a 5% coupon. The deal is rated Aa2 by Moody's and AA by Fitch.
Ramirez & Co. priced the Los Angeles Department of Water and Power's $225 million of Series 2016B power system revenue bonds.
The issue was priced to yield from 1.05% with a 5% coupon in 2021 to 2.31% with a 5% coupon in 2038; a 2042 maturity was priced as 5s to yield 2.33%, a 2045 maturity was priced as 5s to yield 2.36%, and a 2046 maturity was priced as 4s to yield 2.62%. The deal is rated Aa2 by Moody's and AA-minus by S&P and Fitch.
JPMorgan Securities priced the New York City Housing Development Corp.'s $377.01 million of multi-family housing revenue bonds.
The $180.35 million of Series 2016C-1 fixed-rate sustainable neighborhood bonds were remarketed at par to yield from 1.20% in 2019 to 2.50% and 2.55% in a split 2027 maturity, 2.85% in 2031, 3.15% in 2036, 3.30% in 2041, 3.40% in 2047 and 3.45% in 2050.
The $32.82 million of Series 2016C-2 term-rate sustainable neighborhood bonds were remarketed at par to yield 1.50% in 2050; they have a mandatory tender in 2020.
The $163.84 million of Series 2016E fixed-rate sustainable neighborhood bonds were priced to yield from 0.90% and 1% at par in a split 2018 maturity to 2.50% and 2.55% at par in a split 2027 maturity; a 2031 maturity was priced at par to yield 2.28%, a 2036 maturity was priced at par to yield 3.15%, a 2041 maturity was priced at par to yield 3.30%, and a 2047 maturity was priced at par to yield 3.40%. The 2016-2017 maturities were offered as sealed bid.
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 decreased $4.27 billion to $8.63 billion on Thursday. The total is comprised of $4.60 billion of competitive sales and $4.03 billion of negotiated deals.
Tax-Exempt Money Market Funds See Outflows
Tax-exempt money market funds experienced outflows of $546.1 million, bringing total net assets to $208.41 billion in the week ended June 6, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $2.45 million to $208.95 billion in the previous week.
The average, seven-day simple yield for the 297 weekly reporting tax-exempt funds was unchanged at 0.06%.
The total net assets of the 889 weekly reporting taxable money funds increased $20.53 billion to $2.509 trillion in the week ended June 7, after an outflow of $14.69 billion to $2.488 trillion the week before.
The average, seven-day simple yield for the taxable money funds remained at 0.11%.
Overall, the combined total net assets of the 1,186 weekly reporting money funds increased $19.98 billion to $2.717 trillion in the period ended June 7, which followed an outflow of $17.14 billion to $2.697 trillion.
Paul Burton contributed to this report
