Top quality municipal bonds were stronger in light morning activity, traders said, as the municipal bond market moves into an abbreviated trading session ahead of a full market close on Friday.
Next week, traders will see over $6 billion of new deals on the slate, according to estimates from Ipreo, which will consist of $4.45 billion of negotiated deals and $1.66 billion of competitive sales.
Secondary Trading
The yield on the 10-year benchmark muni general obligation was as much as two basis points weaker from 1.82% on Wednesday, while the 30-year muni yield was as much as two basis points weaker from 2.76%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Thursday. The yield on the two-year Treasury rose to 0.86% from 0.85% on Wednesday, while the 10-year Treasury yield fell to 1.85% from 1.88% and the 30-year Treasury bond yield dropped to 2.62% from 2.66%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 97.2% compared with 95.2% on Tuesday, while the 30-year muni to Treasury ratio stood at 104.1% versus 102.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,833 trades on Wednesday on volume of $13.30 billion.
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
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 Markit.
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.
The Week’s Primary Market
Traders saw a robust slate of new issues come to market this week.
Loop Capital Markets priced the city of Houston’s $559.64 million of Series 2016A public improvement refunding bonds. The bonds are rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s.
In the short-term competitive arena, the New York Metropolitan Transportation Authority sold $700 million of transportation revenue bond anticipation notes in two separate deals. Both series of notes are rated MIG1 by Moody’s, SP1-plus by S&P and F1 by Fitch Ratings.
The MTA offered $500 million of Series 2016A Subseries 2016A-1 due Oct. 1. The authority said 14 firms submitted 113 bids; the weighted average true interest cost was 0.45521%. There were six winning firms: Goldman Sachs, Bank of America Merrill Lynch, JPMorgan Securities, Jefferies, RBC Capital Markets and Citigroup. The MTA also sold $200 million of Series 2016A Subseries 2016A-2, due Feb. 1, 2017, attracting 121 bids from 14 firms. The weighted average TIC was 0.59317%. There were five winning firms: Wells Fargo Securities, JPMorgan, PNC Capital Markets, BAML, and Citi.
BAML priced Energy Northwest’s $493.97 million bond deal, consisting of $194.85 million of Series 2016A Project 1 electric revenue refunding bonds, $89.25 million of Series 2016A Columbia Generating Station electric revenue refunding bonds, $199.08 million of Series 2016A Project 3 electric revenue refunding bonds, $1.29 million of Series 2016B Project 1 taxable electric revenue refunding bonds, $4.09 million of Series 2016B Columbia Generating Station taxable electric revenue refunding bonds and $5.43 million of Series 2016B Project 3 taxable electric revenue refunding bonds. The issue is rated Aa1 by Moody’s, AA-minus by S&P and AA by Fitch.
The Board of Regents of the Texas A&M University System came to market with two taxable deals totaling $417.1 million. RBC priced the $325.58 million of Series 2016B taxable revenue financing bonds while Raymond James priced the $91.52 million of taxable Series 2016A revenue financing system bonds. The bonds are rated triple-A by Moody’s and S&P and AA-plus by Fitch.
Citi priced the city and county of Denver’s $242.68 million of dedicated tax revenue refunding and improvement bonds. The bonds are rated Aa3 by Moody’s, AA-minus by S&P and AA by Fitch.
Morgan Stanley priced the Kentucky Turnpike Authority’s $223.25 million of Series 2016A economic development road revenue refunding bonds for revitalization projects. The bonds are rated Aa2 by Moody’s, AA-minus by S&P and A-plus by Fitch.
JPMorgan priced the Broward County School Board, Fla.’s $214.98 million of certificates of participation. The deal is rated Aa3 by Moody’s and A-plus by S&P and Fitch.
JPMorgan Securities priced the San Jacinto Community College District, Texas’ $179.01 million of limited tax GO and GO refunding bonds. The bonds are rated Aa2 by Moody’s and AA by S&P.
JPMorgan Securities priced the Pennsylvania Housing Agency’s $162.1 million of Series 2016-119 single-family mortgage revenue bonds not subject to the alternative minimum tax. The bonds are rated Aa2 by Moody’s and AA-plus by S&P.
Citigroup priced DeKalb County, Ga.’s $142.25 million of Series 2016 special transportation, parks and greenspace and libraries tax district general obligation refunding bonds. The deal is rated Aa3 by Moody’s and AA-minus by Fitch.
JPMorgan priced the city of Mesa, Ariz.’s $137.26 million of Series 2016 utility systems revenue refunding bonds. The bonds are rated Aa2 by Moody’s and AA-minus by S&P.
Citigroup priced the state of New Jersey’s $131.33 million of general obligation refunding bonds. The deal is rated A2 by Moody’s and A by S&P, Fitch and Kroll Bond Rating Agency.
Citi priced the New Jersey Building Authority’s $97.59 million of Series 2016A state building revenue refunding bonds. The bonds are rated A3 by Moody’s and A-minus by S&P and Fitch except for the 2025-2029 maturities which are insured by Build America Mutual and rated AA by S&P.
Bayonne, N.J., issued $69.43 million of insured by BAM. RBC Capital Markets priced the Series 2016 bonds in two series. The $66 million of qualified general improvement refunding bonds were backed by the state’s Municipal Qualified Bond Act; the bonds are rated A3 by Moody’s and AA by S&P. The $3.43 million of school refunding bonds were backed by the School Bond Reserve Act and are rated A2 by Moody’s and AA by S&P.
In the competitive arena, the Florida Department of Transportation sold $113.35 million of Series 2016B turnpike revenue refunding bonds. BAML won the issue with a true interest cost of 1.9801%. The bonds are rated Aa2 by Moody’s Investors Service and AA-minus by Fitch Ratings.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $2.24 billion to $8.58 billion on Thursday. The total is comprised of $2.46 billion of competitive sales and $6.12 billion of negotiated deals.
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.
