Top-shelf municipal bonds were weaker at mid-session, according to traders, with yields on some maturities as much as two basis points stronger.
The market is set to see $7.98 billion of new supply hit the screens next week, according to Ipreo, with $6.35 billion of negotiated deals and $1.63 billion of competitive sales on tap.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as one basis point stronger from 1.64% on Thursday, while the 30-year muni yield was as much as two basis points stronger from 2.58%, according to a read of the Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Friday. The yield on the two-year Treasury increased to 0.82% from 0.81% on Thursday, while the 10-year Treasury yield rose to 1.88% from 1.87% and the yield on the 30-year Treasury bond slipped to 2.69% from 2.70%.
The 10-year muni to Treasury ratio was calculated at 87.6% on Thursday compared with 84.3% on Wednesday, while the 30-year muni to Treasury ratio stood at 95.8% versus 94.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,269 trades on Thursday on volume of $12.16 billion.
The Week's Most Actively Quoted Issues
California issues were among the most actively quoted names in the week ended April 22, according to data released from Markit.
On the bid side, the California taxable 7.3s of 2039 were quoted by 13 unique dealers. On the ask side, California taxable 7.6s of 2040 were quoted by 18 unique dealers. And among two-sided quotes, California taxable 7.55s of 2039 were quoted by 12 dealers.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended April 22 were in Massachusetts, Indiana and Nevada, according to Markit.
In the GO bond sector, the Massachusetts Water Resources Authority 4s of 2040 traded 65 times. In the revenue bond sector, the Indiana Finance Authority 6s of 2039 traded 63 times. And in the taxable bond sector, the North Las Vegas, Nev. 6.572s of 2040 traded 19 times, Markit said.
Primary Market
Municipal bond traders are taking a breather on Friday after the market saw a rather heavy volume week. The state of California alone sold three separate competitive offerings totaling about $1.5 billion.
JPMorgan Securities won the $645.3 million of the Bid Group B tax-exempt various purpose unlimited tax general obligation bonds with a true interest cost of 1.53%. Bank of America Merrill Lynch won the $606.7 million of the Bid Group C tax-exempt various purpose GO bonds with a TIC of 2.83%. Wells Fargo Securities won the $236.8 million of the Bid Group A taxable various purpose GOs with a TIC of 1.33%. All three sales are rated Aa3 by Moody's Investors Service, AA-minus by Standard & Poor's and A-plus by Fitch Ratings.
California Treasurer John Chiang said the state's offering was the largest competitive sale of long-term municipal bonds issued in the United States in a single day in more than 25 years.
"The market's clamor for California bonds provides solid evidence that the market is eager to invest in our state," Chiang said in a press release. "Our government is on sound footing after weathering the worst recession in more than half a century."
The bulk of the issuance was earmarked for refunding existing, higher-interest debt, the treasurer said.
The refunding will save taxpayers about $250 million in interest costs over the remaining life of the bonds. The savings, when on a net present value basis, is around $195 million, according to the treasurer.
The new money raised by the bond sale will pay for highway safety projects, safe drinking water supplies and housing and emergency shelter programs.
Also in the competitive arena, the Florida State Board of Education sold $183.33 million of Series 2016B full faith and credit public education capital outlay refunding bonds. Bank of America Merrill Lynch won the PECO bonds with a TIC of 2.63%. The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
And Fort Lauderdale, Fla., sold $165.94 million of Series 2016 water and sewer revenue and revenue refunding bonds. Raymond James won the deal with a TIC of 2.71%. The deal is rated Aa1 by Moody's and AA-plus by S&P.
In the negotiated sector, BAML priced the Texas Transportation Commission's $615 million of Series 2016 state highway improvement GOs. The deal is rated triple-A by Moody's, S&P and Fitch.
JPMorgan Securities priced the state of Louisiana's $275.94 million of Series 2016B general obligation refunding bonds. JPMorgan also priced the state's $86.81 million of Series 2016C taxable GOs. The deals are rated AA by S&P and AA-minus by Fitch.
JPMorgan also priced the San Diego Unified School District, Calif.'s $126.92 million of Series R-5 GO dedicated unlimited ad valorem property tax refunding bonds. The bonds are rated Aa2 by Moody's, triple-A by Fitch and AA-plus by Kroll Bond Rating Agency.
RBC Capital Markets priced the New Jersey Educational Facilities Authority's $118.59 million of Series 2016B revenue refunding bonds for Montclair State University. The deal is rated A1 by Moody's and AA-minus by S&P.
Citigroup priced the Maryland Stadium Authority's $320 million of Series 2016 construction and revitalization program revenue bonds for the Baltimore City public schools. The deal is rated Aa3 by Moody's, AA-minus by S&P and AA by Fitch.
Bank of America Merrill Lynch priced Arlington County, Va.'s $217.29 million of Series 2016A&B GOs. The deal is rated triple-A by Moody's, S&P and Fitch and carries stable outlooks from all three rating agencies.
Raymond James priced the Lewisville Independent School District, Texas' $336.93 million of Series 2016A & B unlimited tax refunding bonds. The Series 2016A bonds are backed by the Permanent School Fund guarantee program and rated triple-A by S&P and Fitch. The Series 206B bonds are non-PSF backed and rated AA-plus by S&P and Fitch.
JPMorgan Securities priced the Wisconsin Health and Educational Facilities Authority's $157.49 million of Series 2016 revenue bonds for the Medical College of Wisconsin, Inc. The deal is rated A1 by Moody's and AA-minus by S&P.
Citigroup priced the New Brunswick, Middlesex County, N.J., Parking Authority's $116.32 million of Series 2016A city-guaranteed parking revenue refunding bonds. The deal is insured by Build America Mutual and rated AA by S&P which assigns the deal an underlying rating of A-plus.
Barclays Capital Markets priced the Trustees of Purdue University, Ind.'s $117.99 million of Series CC student fee bonds. The deal is rated triple-A by Moody's and S&P.
BAML priced the Stafford County Economic Development Authority, Va.'s $109.55 million of Series 2016 hospital facilities revenue and refunding bonds for the Mary Washington Healthcare Obligated Group. The deal is rated Baa1 by Moody's and triple-B-plus by Fitch.
Wells Fargo Securities priced the Golden Empire Schools Financing Authority, Calif.'s $151.88 million of Series 2016 lease revenue refunding notes for Kern High School District projects. The notes are rated MIG-1 by Moody's and SP-1 by S&P.
Bank of America Merrill Lynch priced the Dormitory Authority of the State of New York's $131.66 million of Series 23016A revenue bonds for Cornell University. The DASNY deal was rated Aa1 by Moody's and AA by S&P.
Morgan Stanley priced the Fairfax County, Va., Industrial Development Authority's $144.10 million of Series 2016A and 2016B healthcare revenue bonds for the Inova Health System. The bonds are rated Aa2 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.29 billion to $11.92 billion on Friday. The total is comprised of $4.28 billion of competitive sales and $7.64 billion of negotiated deals.
Muni Bond Funds See Inflows for 29th Straight Week
For the 29th week in a row, municipal bond funds reported inflows, according to Lipper data released Thursday, as demand for tax-exempts remained high through tax season.
Weekly reporting funds saw $555.910 million of inflows in the week ended April 20, after inflows of $463.733 million in the previous week, Lipper said.
The four-week moving average remained positive at $577.356 million after being in the green at $663.753 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 $608.416 million in the latest week after inflows of $407.212 million in the previous week. Intermediate-term funds had inflows of $157.788 million after inflows of $253.410 million in the prior week.
National funds had inflows of $425.537 million on top of inflows of $342.094 million in the previous week. High-yield muni funds reported inflows of $255.632 million in the latest reporting week, after inflows of $160.322 million the previous week.
Exchange traded funds saw inflows of $130.773 million, after outflows of $57.384 million in the previous week.
