Top-rated municipal bonds finished weaker on Thursday, according to traders, as the last of the week's big new issues came to market.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose four basis points to 1.76% from 1.72% on Wednesday, while the yield on the 30-year increased five basis points to 2.60% from 2.55%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were also 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 1.84% from 1.79% and the yield on the 30-year Treasury bond increased to 2.60% from 2.54%.
The 10-year muni to Treasury ratio was calculated at 95.6% on Thursday compared with 96.3% on Wednesday, while the 30-year muni to Treasury ratio stood at 100.0% versus 100.6%, according to MMD.
Primary Market
Citigroup priced the California Health Facilities Financing Authority's $282.04 million of Series 2016 revenue bonds for El Camino Hospital.
The issue was priced as 5s to yield from 1.38% in 2020 to 3.16% in 2036; a split 2041 maturity was priced as 4s to yield 3.70% and as 5s to yield 3.26%; a split 2046 term bond was priced as 4s to yield 3.75% and as 5s to yield 3.31%.
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 3.02% with a 4% coupon in 2042.
The deal, 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.
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.
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.
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.
