Top-shelf municipal bonds were weaker at mid-session, according to traders who are looking ahead to next week’s new issue slate.
Ipreo estimates total bond volume for next week at $6.87 billion, up from a revised total of $3.22 billion this week, according to data from Thomson Reuters.
Next week’s slate is composed of $5.77 billion of negotiated deals and $1.10 billion of competitive sales.
The yield on the 10-year benchmark muni general obligation was as much as one basis point higher from 1.88% on Thursday, while the 30-year GO yield rose as much as one basis point from 2.73%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Friday. The yield on the two-year Treasury is flat at 1.33% on Thursday, the 10-year Treasury yield dropped to 2.17% from 2.19% and the yield on the 30-year Treasury bond decreased to 2.75% from 2.77%.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 85.8%, compared with 86.5% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 98.6% versus 99.2%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 35,928 trades on Thursday on volume of $9.71 billion.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Aug. 25 were from California, Texas and New Jersey issuers, according to Markit.
In the GO bond sector, the California 5s of 2039 were traded 27 times. In the revenue bond sector, the Texas 4s of 2018 were traded 371 times. And in the taxable bond sector, the Bergen County Improvement Authority, N.J., 2.25s of 2019 were traded 24 times.
Week's actively quoted issues
New Jersey, North Carolina and Illinois names were among the most actively quoted bonds in the week ended Aug. 25, according to Markit.
On the bid side, the New Jersey State Transportation Trust Fund Authority taxable 1.758s of 2018 were quoted by 112 unique dealers. On the ask side, the Mecklenburg County, N.C., GO 3s of 2036 were quoted by 207 dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 24 unique dealers.
Week’s primary market
In the competitive arena, Texas sold $5.4 billion of Series 2017 tax and revenue anticipation notes. Eight groups won the TRANs, including Wells Fargo Securities, Citigroup, RBC Capital Markets, Barclays Capital, Piper Jaffray, JPMorgan Securities, Goldman Sachs & Bank of America Merrill Lynch. The notes, due Aug. 20, 2018, are rated MIG1 by Moody’s Investors Service, SP1-plus by S&P Global Ratings, F1-plus by Fitch Ratings and K1-plus by Kroll Bond Rating Agency.
The Florida Board of Education competitively sold $261.64 million of Series 2017B full faith and credit public education capital outlay refunding bonds. Citigroup won the bonds with a true interest cost of 2.82%. The deal is rated Aa1 by Moody’s and AAA by S&P and Fitch.
The Bend La Pine Administrative School District No. 1, Ore., competitively sold $175 million of Series 2017 general obligation bonds. Mesirow Financial won the deal with a TIC of 2.81%. The deal, which is backed by the Oregon School Bond Guaranty program, is rated Aa1 by Moody’s and AA-plus by S&P.
In the negotiated sector, Wells Fargo priced the Washington Health Care Facilities Authority’s $256.4 million of Series 2017 revenue bonds for the Virginia Mason Medical Center. The deal is rated Baa2 by Moody’s and BBB by S&P.
Piper Jaffray priced the South Dakota Health and Education Facilities Authority’s $212.22 million of Series 2017 revenue bonds for Regional Health. The deal is rated A1 by Moody’s and A-plus by Fitch.
BAML priced Jacksonville, Fla.’s $144.71 million of special revenue and refunding bonds. The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.
Barclays priced the Foothill/Eastern Transportation Corridor Agency’s $125 million of Series 2013B toll road refunding revenue bonds as a remarketing. The deal is rated Baa3 by Moody’s and BBB-minus by S&P and Fitch.
Citi priced the Mecklenburg County Public Facilities Corp., N.C.’s $119.13 million of Series 2017 limited obligation refunding bonds. The deal is rated Aa1 by Moody’s and AA-plus by Fitch and S&P.
Piper Jaffray priced the Conroe Independent School District, Texas’ $97.93 million of unlimited tax refunding bonds. The deal is insured by the Permanent School Fund guarantee program and is rated triple-A by Moody’s and S&P.
Goldman Sachs priced the Indiana Finance Authority’s $178.5 million of Series 2017A highway revenue refunding bonds. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
BAML priced the Tampa-Hillsborough County Expressway Authority’s $158.44 million of revenue bonds. The deal is rated A2 by Moody’s and A-plus by S&P.
Morgan Stanley priced the Oregon Transportation Department’s $132.64 million of highway user tax revenue refunding senior lien bonds. The deal is rated Aa1 by Moody’s, triple-A by S&P and AA-plus by Fitch.
Roosevelt & Cross priced the Erie County Fiscal Stability Authority, N.Y.’s $154.96 million of sales tax and state aid secured bonds and refunding bonds. The deal is rated Aa1 by Moody’s and AAA by Fitch.
BAML priced the Pennsylvania Housing Finance Authority’s $206.97 million of single-family mortgage revenue bonds, consisting of Series 2017-124A subject to the alternative minimum tax and Series 2017-124B non-AMT. The deal is rated Aa2 by Moody’s Investors Service and S&P Global Ratings.
Robert W. Baird priced Alexandria, Va.’s $101.96 million of general obligation refunding bonds. The deal is rated triple-A by Moody’s and S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $86.4 million to $9.07 billion on Friday. The total is comprised of $2.83 billion of competitive sales and $6.24 billion of negotiated deals.
Lipper: Muni bond funds see outflows
Investors in municipal bond funds took cash out of the funds in the latest week, according to Lipper data.
The weekly reporters saw $635.747 million of outflows in the week of Aug. 23, after inflows of $586.766 million in the previous week.
Exchange traded funds saw inflows of $126.924 million, after inflows of $99.484 million in the previous week. Ex-EFTs, muni funds saw $762.671 million of outflows, after inflows of $487.282 million in the previous week.
The four-week moving average was positive at $181.521 million, after being in the green at $421.205 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 had inflows of $464.851 million in the latest week after inflows of $378.696 million in the previous week. Intermediate-term funds had outflows of $133.969 million after inflows of $158.569 million in the prior week.
National funds had outflows of $384.236 million after inflows of $555.401 million in the previous week.
High-yield muni funds reported inflows of $235.522 million in the latest reporting week, after inflows of $185.562 million the previous week.