Top-rated municipal bonds were weaker at mid-session, according to traders, as the last of the week's big new issues were coming to market.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose two to four basis points from 1.72% on Tuesday, while the yield on the 30-year increased two to four basis points from 2.55%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker on Thursday. The yield on the two-year rose to 0.88% from 0.87% on Tuesday, the 10-year Treasury yield gained to 1.85% from 1.79% and the yield on the 30-year Treasury bond increased to 2.61% from 2.54%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 96.3% compared to 97.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 100.6% versus 101.6%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,093 trades on Wednesday on volume of $13.83 billion.
Primary Market
Citigroup priced the California Health Facilities Financing Authority's $275.88 million of Series 2016 revenue bonds for El Camino Hospital.
The issue was priced as 5s to yield from 1.39% in 2020 to 3.13% in 2036; a split 2041 maturity was priced as 4s to yield 3.65% and as 5s to yield 3.23%; a 2046 term bond was priced as 5s to yield 3.28%.
The deal is rated A1 by Moody's Investors Service and A-plus by S&P Global Ratings.
Raymond James & Associates priced the Conroe Independent School District, Texas' $206.69 million of Series 2016A unlimited tax school building and refunding bonds.
The issue was priced to yield from 0.88% with a 2% coupon in 2018 to 3.01% with a 4% coupon in 2042.
The deal, which is backed by the Permanent School Fund guarantee program is rated triple-A by Moody's and S&P.
Morgan Stanley priced the New Hampshire Health and Education Facilities Authority's $147.995 million of Series 2016 revenue bonds for Elliot Hospital.
The issue was priced as 5s to yield from 1.69% in 2018 to 3.53% in 2033; a split 2038 maturity was priced as 4s to yield 4.16% and as 5s to yield 3.71%. A 2017 maturity was offered as a sealed bid.
The deal is rated Baa1 by Moody's and BBB by S&P.
Piper Jaffray is set to price the New Hope Cultural Educational Facilities Finance Corp., Texas' $150 million of Texas A&M University Cain Hall redevelopment project Phase II bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.
In the competitive arena, the North Texas Municipal Water District sold $330.56 million of Series 2016 water system revenue refunding and improvement bonds.
Bank of America Merrill Lynch won the deal with a true interest cost of 3.28%.
The issue was priced as 5s to yield from 0.85% in 2017 to 2.75% in 2037; a 2041 maturity was priced as 4s to yield 3.10% and a 2046 maturity was priced as 4s to yield 3.15%.
The deal is rated Aa2 by Moody's and AAA by S&P.
Prior to this sale, the district last sold comparable bonds competitively on April 23, 2015, when Barclays Capital won $302.13 million of Series 2015 water system revenue refunding and improvement bonds with a TIC of 3.48%.
Since 2006, the NTMWD has sold about $2.8 billion of securities, with the largest issuance occurring in 2015 when it sold $492 million, with Thursday's sale, the district will have sold roughly the same amount. The district sold no bonds in 2011.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $6.14 billion to $12.96 billion on Thursday. The total is comprised of $3.00 billion of competitive sales and $9.96 billion of negotiated deals.
Tax-Exempt Money Market Fund Inflows
Tax-exempt money market funds experienced inflows of $568.9 million, bringing total net assets to $128.21 billion in the week ended Oct. 24, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $290.6 billion to $127.64 billion in the previous week. This two week streak comes on the heels of 32 consecutive weeks of outflows.
The average, seven-day simple yield for the 237 weekly reporting tax-exempt funds dropped to 0.25% from 0.32% in the previous week.
The total net assets of the 855 weekly reporting taxable money funds increased $17.71 billion to $2.487 trillion in the week ended Oct. 25, after an outflow of $7.51 billion to $2.469 trillion the week before.
The average, seven-day simple yield for the taxable money funds decreased to 0.13% from 0.14% the prior week.
Overall, the combined total net assets of the 1,092 weekly reporting money funds rose $18.28 billion to $2.615 trillion in the period ended Oct. 25, which followed an outflow of $7.22 billion to $2.597 trillion.
