Top shelf municipal bonds were weaker at mid-session, traders said, as the market looks ahead to next week’s new supply.
Ipreo estimates total volume for next week at $7.32 billion, up from a revised total of $7.02 billion this week, according to data from Thomson Reuters.
Next week’s slate is composed of $4.77 billion of negotiated deals and $2.55 billion of competitive sales.
The yield on the 10-year benchmark muni general obligation rose as much as one basis point from 1.92% on Thursday while the 30-year GO yield increased as much as one basis point from 2.71%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were also weaker. The yield on the two-year Treasury rose to 1.35% from 1.34% on Thursday, the 10-year Treasury yield gained to 2.28% from 2.23% and the yield on the 30-year Treasury bond increased to 2.85% from 2.81%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 86.1%, compared with 85.8% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.5% versus 96.2%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,270 trades on Thursday on volume of $12.16 billion.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Aug. 4 were from Massachusetts, California and Illinois issuers, according to Markit.
In the GO bond sector, the Massachusetts 2s of 2018 were traded 49 times. In the revenue bond sector, the Bay Area Toll Authority of Calif.. 3.25s of 2036 were traded 104 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 24 times.
Week's actively quoted issues
Illinois and Virginia names were among the most actively quoted bonds in the week ended Aug. 4, according to Markit.
On the bid side, the Illinois taxable 5.1s of 2033 were quoted by 47 unique dealers. On the ask side, the Virginia College Building Authority revenue 3s of 2035 were quoted by 380 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 25 unique dealers.
Week’s primary market
Bank of America Merrill Lynch priced the Bay Area Toll Authority of Calif.’s $1.4 billion bond offering, which consisted of $552.09 million of senior bonds made up of Series 2017- E, G, and H term-rates and $852.02 million of Series 2017-I index-rates and Series 2017 S-7 fixed-rated subordinate bonds.
The subordinate bonds were rated A1 by Moody’s Investors Service and AA-minus by S&P Global Ratings. The senior term-rates were rated Aa3 by Moody’s and AA by S&P and Fitch Ratings.
JPMorgan Securities priced the California Department of Water Resources’ $149.25 million of Series AT index floating rate revenue bonds as a remarketing. The deal is rated AA1 by Moody’s and AAA by S&P.
Wells Fargo Securities priced the Washington Metropolitan Area Transit Authority’s $496.5 million of Series 2017B gross revenue transit bonds. The deal is rated AA-minus by S&P and Fitch.
Goldman Sachs priced Austin, Texas’ $311.37 million of Series 2017 water and wastewater system revenue refunding bonds. The deal is rated Aa2 by Moody’s, AA by S&P and AA-minus by Fitch.
Piper Jaffray priced the city of San Antonio, Texas’ $181.17 million of general improvement bonds and combination tax and revenue certificates of obligations and tax notes. The deal is rated triple-A by Moody’s, S&P and Fitch.
Bank of America Merrill Lynch priced the state of North Carolina’s $225.04 million of Series 2017 grant anticipation revenue vehicle refunding bonds. The deal is rated A2 by Moody’s, AA by S&P and A-plus by Fitch.
Morgan Stanley priced the Kentucky Turnpike Authority’s $174.34 million of Series 2017AB economic development road revenue refunding bonds for revitalization projects. The deal is rated Aa3 by Moody’s and AA-minus by S&P.
JPMorgan Securities priced the New Jersey Health Care Facilities Financing Authority’s $265 million of Series 2017A revenue bonds for the Inspira Health Obligated Group. The deal is rated A2 by Moody’s and A by Fitch.
JPMorgan also priced Orlando, Fla.’s $218.38 million of Series 2017A senior lien and Series 2017B second lien tourist development tax refunding revenue bonds. The deal was backed by Assured Guaranty Municipal and rated AA by S&P.
In then competitive arena, the Portland Public Schools sold $410.84 million of unlimited tax general obligation bonds for the School District No. 1 of Multnomah County in two separate sales under the Oregon School Bond Guaranty Act. Wells Fargo Securities won the $241.89 million of Series 2017B tax-exempt GOs with a TIC of 3.12%. Wells Fargo also won the $168.95 million of Series 2017A taxable GOs with a true interest cost of 1.47%. Both deals are rated Aa1 by Moody’s and AA-plus by S&P.
The Metropolitan Atlanta Rapid Transit Authority sold $268.03 million of Series 2017C sales tax revenue bonds. Bank of America Merrill Lynch won the bonds with a TIC of 3.39%. The deal is rated Aa2 by Moody’s and AA-plus by S&P.
The Regional Transportation Authority of Illinois sold $188.38 million of Series 2017A general obligation refunding bonds. BAML won the bonds with a TIC of 2.76%. The deal is rated AA by S&P and Fitch.
The state of South Carolina competitively sold $157.18 million of unlimited tax GOs for Clemson University in two separate sales. Morgan Stanley won the $118.54 million of Series 2017A GO state institution bonds with a TIC of 2.445%. Citigroup won the $38.64 million of Series 2017B GO state institution bonds with a TIC of 2.5974%. Both deals are rated triple-A by Moody’s, S&P and Fitch Ratings.
The Ft. Mill School District No. 4 of York County, S.C., sold $119.08 million of Series 2017B GOs. Citi won the bonds with a true interest cost of 2.71%. The deal is rated Aa1 by Moody’s and AA by S&P.
Oakland, Calif., competitively sold $116.09 million of bonds in two separate offerings. Fidelity Capital Markets won the $59.93 million of Series 2017A-1 Measure KK tax-exempt GOs with a TIC of 3.59% while Raymond James won the $56.16 million of Series 2017A-2 Measure KK taxable GOs with a TIC of 3.15%. The deals are rated Aa2 by Moody’s and AA by S&P.
Plano, Texas, sold $108.02 million of Series 2017 unlimited tax school building bonds. Wells Fargo won the bonds with a TIC of 1.53%. The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.
In the short-term competitive sector, Massachusetts sold $1.5 billion of revenue anticipation notes in three separate offerings.
The $500 million of Series 2017A RANs were won by four firms: Goldman Sachs, JPMorgan Securities, Jefferies and Citigroup. The $500 million of Series 2017B RANs were won by five firms: BAML, Morgan Stanley, Citi, Barclays Capital and Williams Capital. The $500 million of Series 2017C RANs were won by five firms: JPMorgan, Morgan Stanley, Citi, Stifel and Barclays. All three deals are rated MIG1 by Moody’s, SP1-plus by S&P and F1-plus by Fitch.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $580.4 million to $10.35 billion on Friday. The total is comprised of $5.02 billion of competitive sales and $5.32 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds again saw investors put cash into the funds in the latest week, according to Lipper data.
The weekly reporters saw $143.847 million of inflows in the week of Aug. 2, after inflows of $322.992 million in the previous week.
The four-week moving average turned positive at $148.209 million, after being in the red at $2.329 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 $118.150 million in the latest week after inflows of $229.732 million in the previous week. Intermediate-term funds had inflows of $19.414 million after inflows of $70.336 million in the prior week.
National funds had inflows of $203.351 million after inflows of $431.650 million in the previous week. High-yield muni funds reported inflows of $73.549 million in the latest reporting week, after inflows of $188.672 million the previous week.
Exchange traded funds saw inflows of $54.212 million, after inflows of $123.905 million in the previous week.