Top-rated municipal bonds were weaker at mid-session, traders said, ahead of a $6.7 billion new issue slate, marked by the postponement of what would have been the upcoming week's biggest sale.
Total potential volume for next week is estimated by Ipreo at $6.66 billion, down from total sales of $7.99 billion this week, according to revised data from Thomson Reuters.
Next week's calendar is diminished by a late Thursday announcement that Pennsylvania's competitive sale of $1.2 billion general obligation bonds was postponed. It had been slated for Tuesday, July 19. No reason was immediately given for the deal's postponement nor was a new sale date provided.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose two to four basis points from 1.41% on Thursday, while the yield on the 30-year muni increased three to five basis points from 2.05%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker on Friday. The yield on the two-year Treasury rose to 0.70% from 0.67% on Thursday as the 10-year Treasury yield gained to 1.58% from 1.53% and the yield on the 30-year Treasury bond increased to 2.29% from 2.25%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 92.1% compared to 94.1% on Wednesday, while the 30-year muni to Treasury ratio stood at 91.1% versus 92.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,321 trades on Thursday on volume of $14.43 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended July 15 were from Oregon and New York issuers, according to
In the GO bond sector, the Oregon 2s of 2030 were traded 23 times. In the revenue bond sector, the NYC TFA 5s of 2040 were traded 67 times. And in the taxable bond sector, the Port Morrow, Ore., 2.987s of 2036 were traded 58 times.
Week's Most Actively Quoted Issues
Washington and New York issues were among the most actively quoted names in the week ended July 15, according to Markit.
On the bid side, the Port of Seattle, Wash., revenue 5s of 2023 were quoted by 19 unique dealers. On the ask side, the N.Y. MTA revenue 5s of 2037 were quoted by 18 unique dealers. And among two-sided quotes, the N.Y. TDC revenue 5s of 2041 were quoted by 16 dealers.
Primary Market
Supply was plentiful during the week.
Siebert Brandford Shank priced the NYC TFA's $800 million of tax-exempt future tax secured subordinate Fiscal 2017 Subseries A-1 bonds for institutions after a two-day retail order period.
The bonds are rated Aa1 by Moody's Investors Service and triple-A by S&P Global Ratings and Fitch Ratings; all three agencies have a stable outlook on the credit.
The TFA also competitively sold two separate taxable offerings totaling $250 million. RBC Capital Markets won the $186.9 million of Fiscal 2017 Series A Subseries A-2 future tax secured bonds with a true interest cost of 1.98%. Bank of America Merrill Lynch won the $63.1 million of Fiscal 2017 Series A Subseries A-3 future tax secured bonds with a TIC of 2.58%.
Loop Capital Markets priced the Michigan Department of Transportation's $612.99 million of Series 2016 grant anticipation refunding bonds. The Garvee deal is rated A2 by Moody's and AA by S&P.
JPMorgan Securities priced and repriced the Louisville-Jefferson County Metropolitan Government, Ky.'s $521.05 million of Series 2016A health system revenue bonds for Norton Healthcare. The deal is rated A-minus by S&P and A by Fitch.
Ramirez priced Miami-Dade County's $309.5 million of Series 2016 subordinate special obligation refunding bonds. The deal is rated A-plus by S&P and Fitch.
BAML priced the Port of Morrow, Ore.'s $320.96 million of taxable Series 2016-1 transmission facilities revenue bonds for the Bonneville Cooperation Project No. 4. The deal is rated Aa1 by Moody's and AA by Fitch.
JPMorgan Securities priced the Los Angeles Community College District's $300 million of 2008 Election Series I general obligation bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P.
JPMorgan also priced the Massachusetts Port Authority's $231.57 million of revenue and revenue refunding bonds. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
Estrada Hinojosa priced the Board of Regents of the Texas A&M University System's $139.35 million of Series 2016E revenue financing system bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
BAML priced the Wisconsin Public Finance Authority's $137.27 million of Series 2016A hospital revenue refunding bonds for the Renown Regional Medical Center. The deal is rated A2 by Moody's and A by S&P.
Ramirez priced the State of New York Mortgage Agency's $123.81 million of homeowner mortgage revenue bonds for institutions after holding a one-day retail order period. The SONYMA deal is rated Aa1 by Moody's.
In the short-term sector, BAML priced Oregon's $593.42 million of Series 2016A full faith and credit tax anticipation notes. The TANs were priced as 2s to yield 0.59% in 2017. The deal is rated MIG1 by Moody's, SP1-plus by S&P and F1-plus by Fitch.
In the competitive arena, Clark County, Nev., sold $285.41 million of Series 2016B limited tax GO bond bank refunding bonds additionally secured by pledged revenues. JPMorgan Securities won the deal with a TIC of 2.19%. The deal is rated Aa1 by Moody's and AA by S&P.
Hillsborough County, Fla., sold $204.65 million of Series 2016 utility revenue bonds. Wells Fargo Securities won the bonds with a true interest cost of 2.84%. The deal is rated triple-A by Moody's, AA-plus by S&P and triple-A by Fitch.
Wichita, Kan., sold two separate issues totaling about $129 million. BAML won the $103.06 million of Series 2016B water and sewer utility refunding revenue bonds with a TIC of 2.36%. BAML also won the $26.09 million of Series 2016A water and sewer utility revenue bonds with a TIC of 2.39%. Both deals are rated AA-minus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $759.3 million to $9.25 billion on Friday. The total is comprised of $2.37 billion of competitive sales and $6.88 billion of negotiated deals.
Lipper: Muni Bond Funds See Inflows
For the 41st straight week, municipal bond funds reported inflows, according to Lipper data released on Thursday.
The weekly reporters saw $1.222 billion of inflows in the week ended July 13, after inflows of $737.996 million in the previous week, Lipper said.
The four-week moving average remained positive at $1.030 billion after being in the green at $950.126 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 experienced inflows, gaining $762.527 million in the latest week after inflows of $374.956 million in the previous week. Intermediate-term funds had inflows of $186.246 million after inflows of $147.424 million in the prior week.
National funds had inflows of $995.331 million on top of inflows of $688.442 million in the previous week. High-yield muni funds reported inflows of $335.893 million in the latest reporting week, after inflows of $200.676 million the previous week.
Exchange traded funds saw inflows of $124.531 million, after inflows of $197.821 million in the previous week.
