Top quality municipal bonds ended stronger on Thursday, traders said, as the last of the week’s big deals hit the screens.
Primary market
In the competitive arena, the Metropolitan Atlanta Rapid Transit Authority sold $268.03 million of Series 2017C sales tax revenue bonds.
Bank of America Merrill Lynch won the bonds with a true interest cost of 3.39%.
The issue was priced to yield from 0.85% with a 5% coupon in 2018 to approximately 3.38% with a 3.25% coupon in 2039.
The deal is rated Aa2 by Moody’s Investors Service and AA-plus by S&P Global Ratings.
Since 2007 the authority has sold $2.59 billion of securities, with the most issuance occurring in 2007 when it sold $536 million. MARTA did not come to market in 2008 or 2010 through 2011, and with Thursday’s sale it has now issued more debt this year than it has since 2014.
The Portland Public Schools sold $410.84 million of unlimited tax general obligation bonds for the School District No. 1 of Multnomah County in two separate sales under the Oregon School Bond Guaranty Act.
Wells Fargo Securities won the $241.89 million of Series 2017B tax-exempt GOs with a TIC of 3.12%. The issue was priced to yield from 1.01% with a 5% coupon in 2020 to 3.43% with a 3.25% coupon in 2042; a 2044 maturity was priced at par to yield 3.50%.
Wells Fargo also won the $168.95 million of Series 2017A taxable GOs with a TIC of 1.47%. The issue was priced as 1 1/2s to yield 1.25% in 2018 and at par to yield 1.45% in 2019 and 1.65% in 2020.
Both deals are rated Aa1 by Moody’s and AA-plus by S&P.
The state of South Carolina competitively sold $157.18 million of unlimited tax GOs for Clemson University in two separate sales.
Morgan Stanley won the $118.54 million of Series 2017A GO state institution bonds with a TIC of 2.445%. The deal was priced to yield from 0.80% with a 5% coupon in 2018 to 3.15% with a 3% coupon in 2037.
Citigroup won the $38.64 million of Series 2017B GO state institution bonds with a TIC of 2.5974%. Both deals are rated triple-A by Moody’s, S&P and Fitch Ratings.
Plano, Texas, sold $108.02 million of Series 2017 unlimited tax school building bonds.
Wells Fargo won the bonds with a TIC of 1.53%. The issue was priced to yield from 0.80% with a 3% coupon in 2018 to approximately 3.138% with a 3% coupon in 2037.
The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.
In the negotiated sector, JPMorgan Securities priced the New Jersey Healthcare Facilities Financing Authority’s $265 million of Series 2017A revenue bonds for the Inspira Health Obligated Group.
The issue was priced to yield from 1.03% with a 2% coupon in 2018 to 3.20% with a 5% coupon in 2037; a 2042 maturity was priced as 5s to yield 3.30% and a 2047 maturity was priced as 4s to yield 3.77%.
The deal is rated A2 by Moody’s and A by Fitch.
JPMorgan also priced Orlando, Fla.’s $218.38 million of Series 2017A senior lien and Series 2017B second lien tourist development tax refunding revenue bonds.
The $195.89 million of senior bonds were priced to yield from 1.01% with a 4% coupon in 2018 to 3.20% with a 5% coupon in 2038. The $22.485 million of second lien subordinate bonds were priced to yield from 1.13% with a 3% coupon in 2018 to 3.35% with a 5% coupon in 2038.
The entire deal is wrapped by insurance from Assured Guaranty Municipal Corp., and is rated AA by S&P.
Secondary market
The yield on the 10-year benchmark muni general obligation fell two basis points to 1.92% from 1.94% on Wednesday while the 30-year GO yield dropped three basis points to 2.71% from 2.74%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Thursday. The yield on the two-year Treasury dipped to 1.34% from 1.36% on Wednesday, the 10-year Treasury yield declined to 2.23% from 2.26% and the yield on the 30-year Treasury bond decreased to 2.81% from 2.84%.
The 10-year muni to Treasury ratio was calculated at 86.1% on Thursday, compared with 85.8% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.5% versus 96.2%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 43,618 trades on Wednesday on volume of $13.98 billion.
Tax-exempt money market funds see inflows
Tax-exempt money market funds experienced inflows of $231.2 million, bringing total net assets to $130.23 billion in the week ended July 31, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $26.5 million to $130.00 billion in the previous week.
The average, seven-day simple yield for the 227 weekly reporting tax-exempt funds was increased to 0.37% from 0.36% the previous week.
The total net assets of the 849 weekly reporting taxable money funds increased $10.72 billion to $2.490 trillion in the week ended Aug. 1, after an inflow of $10.62 billion to $2.480 trillion the week before.
The average, seven-day simple yield for the taxable money funds increased to 0.66% from 0.64% in the prior week.
Overall, the combined total net assets of the 1,076 weekly reporting money funds increased $10.95 billion to $2.621 trillion in the week ended Aug. 1, after inflows of $10.65 million to $2.610 trillion in the prior week.
