Top-shelf municipal bonds were weaker at midday, according to traders who said yields on some maturities were as many as five basis points higher. This is ahead of an estimated almost $11.5 billion of new issuance expected to hit screens next week.
Secondary Market
Top-rated municipal bonds were weaker at midsession on Friday. The yield on the 10-year benchmark muni general obligation was between two and four basis points higher from 1.45% on Thursday, while the yield on the 30-year rose between three and five basis points from 2.15%, according to the a read of Municipal Market Data's triple-A scale.
Treasuries were weaker on Friday around midday. The yield on the two-year Treasury rose to 0.78% from 0.77% on Thursday, the 10-year Treasury yield gained to 1.66% from 1.61% and the yield on the 30-year Treasury bond increased to 2.39% from 2.32%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 90.0% compared to 93.8% on Wednesday, while the 30-year muni to Treasury ratio stood at 92.8% versus 95.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,293 trades on Thursday on volume of $11.21 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Sept. 9 were from California, Ohio and Illinois issuers, according to
In the GO bond sector, the California 3s of 2046 were traded 65 times. In the revenue bond sector, the Hamilton County, Ohio 5s of 2046 were traded 33 times. And in the taxable bond sector, the Illinois 6.63s of 2035 were traded 21 times.
Week's Most Actively Quoted Issues
Puerto Rico and California issues were among the most actively quoted names in the week ended Sept. 9, according to Markit.
On the bid side, the Puerto Rico Commonwealth GO 5.5s of 2039 were quoted by 13 unique dealers. On the ask side, the California HFFA revenue 3s of 2047 were quoted by 29 unique dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 15 unique dealers.
Week's Primary Market
Estimated volume for the week of Sept. 16 is way up to $11.42 billion from a revised total of $2.59 billion in the past week, according to revised data from Thomson Reuters. The upcoming slate is composed of $9.37 billion of negotiated bond deals and $2.05 billion of competitive bond sales.
This week's holiday-shortened supply slate was cut down even more after the Texas Transportation Commission's sale of $615.26 million of Series 2016A fixed-rate state highway fund first tier revenue bonds and $90 million of Series 2016B state highway fund first tier revenue refunding put bonds was postponed until early October.
In the competitive arena, the Dormitory Authority of the State of New York sold five issues totaling $703.86 million.
Bank of America Merrill Lynch won the $295.29 million of Series 2016A Group C tax-exempt general purpose state personal income tax revenue bonds with a true interest cost of 3.49%. Citigroup won the $242.84 million of Series 2016A Group B tax-exempt general purpose state personal income tax revenue bonds with a TIC of 2.84%.
JPMorgan Securities won the $77.92 million of Series 2016A Group A tax-exempt general purpose state personal income tax revenue bonds with a TIC of 2.84%. JPMorgan also won the $65.75 million of Series 2016C taxable general purpose state personal income tax revenue bonds with a TIC of 1.51%.
And Roosevelt & Cross won the $22.07 million of Series 2016B tax-exempt general purpose state personal income tax revenue bonds with a TIC of 2.48%.
The DASNY deals are rated Aa1 by Moody's Investors Service and triple-A by S&P Global Ratings.
Also in the competitive sector, Washington state sold about $225 million of motor vehicle future tax general obligation bonds in two separate offerings. Citigroup won the $134.2 million of Series 2017B GOs with a true interest cost of 2.9969%. Citi also won the $90.37 million of Series 2017C GO SR 520 Corridor program toll revenue bonds with a TIC of 3.0055%. The deals are rated Aa1 by Moody's and AA-plus by S&P and Fitch Ratings.
In the negotiated sector, BAML priced the California's Health Facilities Financing Authority's $288.52 million of Series 2016B revenue bonds for Providence St. Joseph Health. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
JPMorgan priced the Indiana Finance Authority's $234.15 million of Series 2016A first lien wastewater utility revenue green bonds and Series 2016B second lien wastewater utility revenue refunding bonds. The first-lien bonds are rated AA by S&P and A by Fitch while the second-lien bonds are rated AA-minus by S&P and A by Fitch.
Wells Fargo Securities priced Austin, Texas' $164.96 million of Series 2016 public improvement and refunding bonds, Series 2016 certificates of obligation and Series 2016 public property finance contractual obligations. The deal is rated triple-A by Moody's, S&P and Fitch and carries stable outlooks from all three agencies.
Jefferies priced the New York Counties Tobacco Trust VI's $161.54 million of Series 2016 tobacco settlement pass-through bonds. Ratings from S&P on the bonds ranged from A to BBB.
Morgan Stanley priced the Illinois Housing Development's $144.07 million of Series 2016B and C homeownership mortgage revenue bonds. The deal is rated Aa3 by Moody's and AA by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.57 billion to $16.34 billion on Friday. The total is comprised of $3.60 billion of competitive sales and $12.75 billion of negotiated deals.
Lipper: Muni Bond Funds See Inflows
For the 49th straight week, municipal bond funds reported inflows, according to Lipper data released on Thursday. The weekly reporters saw $985.786 million of inflows in the week ended Sept. 7, after inflows of $428.291 million in the previous week, Lipper said.
The four-week moving average remained positive at $818.423 million after being in the green at $789.730 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 $617.231 million in the latest week after inflows of $159.510 million in the previous week. Intermediate-term funds had inflows of $182.862 million after inflows of $55.211 million in the prior week.
National funds had inflows of $912.909 million on top of inflows of $342.335 million in the previous week. High-yield muni funds reported inflows of $264.215 million in the latest reporting week, after inflows of $30.474 million the previous week.
Exchange traded funds saw outflows of $71.151 million, after inflows of $95.576 million in the previous week.
