Top-rated municipal bonds were weaker at mid-session as traders looked ahead to the biggest supply slate of 2016. The last time the market saw a bigger slate of sales was in the week of March 9, 2015, when $12.44 billion of bonds were sold.
Municipal volume for the upcoming week is estimated by Ipreo at $10.10 billion, up from a revised total of $8.89 billion sold this week, according to Thomson Reuters. The calendar consists of $8.79 billion of negotiated deals and $1.31 billion of competitive sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation was two to four basis points stronger from 1.71% on Thursday, while the 30-year muni yield was one to three basis points stronger from 2.77%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were lower on Friday. The yield on the two-year Treasury rose to 0.80% from 0.72% on Thursday, while the 10-year Treasury yield gained to 1.76% from 1.70% and the 30-year Treasury bond yield increased to 2.62% from 2.57%.
The 10-year muni to Treasury ratio was calculated on Thursday at 100.9% compared to 98.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 107.7% versus 106.7%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,585 trades on Thursday on volume of $10.05 billion.
The Week's Most Actively Quoted Issues
Puerto Rico, Maryland and California were among some of the most actively quoted names in the week ended Feb. 26, according to data released by Markit.
On the bid side, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 12 unique dealers. On the ask side, the Maryland Health and Higher Educational Facilities Authority revenue 4s of 2046 were quoted by 22 unique dealers. And among two-sided quotes, California's Golden State Tobacco Securitization revenue 5 3/4s of 2047 were quoted by 19 dealers.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Feb. 26 were in New York, Alabama and Florida, according to Markit.
In the GO bond sector, the New York City 3s of 2034 traded 58 times. In the revenue bond sector, the Lower Alabama Gas District 5s of 2046 traded 84 times. And in the taxable bond sector, the Florida Administrative Finance Corp. 2.163s of 2019 traded 82 times, Markit said.
The Week's Primary Market
Municipal bond traders were wrapping up an active week where many big deals came to market.
JPMorgan Securities priced the Florida State Board of Administration Finance Corp.'s $1.2 billion of Series 2016A taxable revenue bonds on Monday. The bonds are rated Aa3 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Florida bond director Ben Watkins told The Bond Buyer he was very pleased with the sale's results.
The relative market stability made it a good time to go early in the week, he said, adding, "It's always better to be first than last."
Jefferies priced New York City's $800.01 million of Fiscal 2016 Series C and D general obligation bonds for institutions after a two-day retail order period.
"The city received approximately $251 million of retail orders for the bonds during the two-day retail order period," the City Comptroller's office said in a press release. "Stated yields on the bonds ranged from 0.20% in 2016 to 2.65% in 2033 for a premium coupon bond and 3.09% in 2035 for a discount bond."
The issue is rated Aa2 by Moody's and AA by S&P and Fitch.
Bank of America Merrill Lynch priced the University of North Carolina at Chapel Hill's $400.96 million of taxable Series 2016C general revenue refunding bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
BAML also priced the Hampton Roads Sanitation District, Va.'s $242.23 million of subordinate wastewater revenue bonds. The bonds are rated AA by S&P and Fitch.
BOSC priced Plano Independent School District, Texas' $303.82 million of Series 2016A 201 unlimited tax refunding bonds. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's, S&P and Fitch.
BOSC also priced the Allen Independent School District, Texas' $144.49 million of Series 2016 unlimited tax refunding bonds. The bonds are backed by the PSF and rated triple-A by Moody's and S&P.
Goldman, Sachs priced the Lower Alabama Gas District's $599.35 million of gas project revenue bonds. The deal is rated A3 by Moody's and A-minus by Fitch.
RBC Capital Market priced the Maryland Economic Development Corp.'s $133.60 million of Series 2016 student housing refunding revenue bonds for the University of Maryland at College Park Projects. The entire deal is backed by Assured Guaranty Municipal and is rated A2 by Moody's and AA by S&P.
Citigroup priced the Transmission Agency of Northern California's $175.07 million of revenue refunding bonds for the California-Oregon Transmission Project. The deal is rated Aa3 by Moody's and A-plus by S&P.
Citi priced California's Eastern Municipal Water District's $209.46 million of Series 2016A refunding water and wastewater revenue bonds. The deal is rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Citi also priced the Board of Regents of the University of Arizona Systems $175.84 million of Series 2016 revenue refunding bonds. The deal is rated Aa2 by Moody's and AA-minus by S&P.
The largest competitive sale of the week came from North Carolina, as the Old North State sold $330 million of GO refunding bonds. Morgan Stanley won the bid with a true interest cost of 1.95%. The deal is rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
Ohio competitively sold five issues totaling $367.01 million. The $137.985 million of Series 2016A common schools GO refunding bonds was won by RBC with a TIC of 1.57%. The $100 million of Series 2016A taxable Third Frontier Research and Development GOs was won by Wells Fargo Securities with a TIC of 2.01%. The $96.15 million of Series 2016A infrastructure improvement GO refunding bonds was won by Citi with a TIC of 1.91%. The $20.87 million of Series 2016A conservation projects GO refunding bonds was won by PNC Capital Markets with a TIC of 1.59%. The $12 million Series N coal development GOs was won by PNC with a TIC of 1.49%. All issues are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Wisconsin competitively sold $297.69 million of general obligation bonds, with BAML won the bonds with a TIC of 3.24%. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
Baltimore County, Md., competitively sold three issues totaling about $265.71 million. The deals consist of $112 million of Series 2016 consolidated public improvement bonds, $88 million of 78th issue Metropolitan District bonds and $54.87 million of Series 2016 Metropolitan District refunding bonds. The $112 million deal was won by Citi with a TIC of 2.60%. The $88 million deal was won by BAML with a TIC of 3.21%. The $65.705 million deal was won by Wells Fargo with a TIC of 3.23%. All three sales are rated triple-A by Moody's S&P and Fitch.
Highland Park Independent School District, Texas, competitively sold $206.66 million of Series 2016 unlimited tax school building bonds. BAML won the issue with a TIC of 2.95%. The deal is backed by the PSF and rated triple-A by Moody's and Fitch.
The New York City Municipal Water Finance Authority competitively sold $196.59 million of Fiscal 2016 Series A water and sewer system revenue bonds. Citi won the deal with a true interest cost of 3.15%. The bonds are rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
The state of Alabama sold two competitive issues totaling $125.66 million. The $99.14 million of Series 2016-A bonds were won by BAML with a TIC of 2.69%. The $26.52 million of series 2016-B bonds were won by Wells Fargo with a TIC of 0.89%. The bonds are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $6.56 million to $12.27 billion on Friday. The total is comprised of $2.13 billion of competitive sales and $10.14 billion of negotiated deals.
Muni Bond Funds See Inflows for 21st Straight Week
Municipal bond funds reported inflows for the 21st straight week, according to Lipper data released on Thursday. Weekly reporting funds saw $696.392 million of inflows in the week ended Feb. 24, after inflows of $688.964 million in the previous week, Lipper said.
So far this year, muni mutual funds have seen about $6.0 billion of inflows.
The four-week moving average remained positive at $744.844 million after being in the green at $719.442 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 $654.431 million in the latest week after inflows of $460.258 million in the previous week. Intermediate-term funds had inflows of $89.040 million after inflows of $191.155 million in the prior week.
National funds saw inflows of $589.237 million after inflows of $575.066 million in the prior week. High-yield muni funds reported inflows of $245.834 million in the latest reporting week, after inflows of $99.768 million the previous week.
Exchange traded funds saw inflows of $173.593 million, after inflows of $90.824 million in the previous week.
