Top-shelf municipal bonds were weaker at mid-session, according to traders, who were looking ahead to next week's $7.32 billion new issue slate.
Ipreo estimates volume for next week at $7.32 billion, up from a revised total of $5.10 billion this week, according to updated data from Thomson Reuters.
The upcoming calendar is composed of $6.75 billion of negotiated deals and $569.2 million of negotiated sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose as much as one basis point from 2.24% on Thursday, while the 30-year GO yield increased as much as one basis point from 3.03%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Friday. The yield on the two-year declined to 1.26% from 1.28% on Thursday, while the 10-year Treasury yield dipped to 2.41% from 2.42%, and the yield on the 30-year Treasury bond increased to 3.04% from 3.03%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 92.7% compared with 93.5% on Wednesday, while the 30-year muni to Treasury ratio stood at 100.1%, versus 100.6%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,659 trades on Thursday on volume of $14.64 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended March 31 were from Connecticut, California and Massachusetts, according to
In the GO bond sector, the Connecticut 4s of 2037 were traded 87 times. In the revenue bond sector, the San Jose Airport 5s of 2041 were traded 44 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 20 times.
Week's Most Actively Quoted Issues
Puerto Rico, California and Chicago names were among the most actively quoted bonds in the week ended March 31, according to Markit.
On the bid side, the Puerto Rico Commonwealth Aqueduct and Sewer Authority revenue 5.25s of 2042 were quoted by 69 unique dealers. On the ask side, the California Health Facilities Financing Authority revenue 4s of 2042 were quoted by 218 unique dealers. And among two-sided quotes, the Chicago taxable 6.314s of 2044 were quoted by 18 unique dealers.
Week's Primary Market
The municipal bond market was taking stock of this week's new issuance after most of the week's supply was placed to a warm reception, including the taxable and high-yield issues.
Citigroup priced Connecticut's $743.4 million of general obligation and GO refunding bonds. The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.
Jefferies priced the Golden State Tobacco Securitization Corp.'s $630.79 million of Series 2017A-1 tobacco settlement asset-backed bonds. The preliminary structured finance ratings on the deal from S&P ranged as follows: 2018-2020: A; 2021-2026: BBB-plus; 2027-2029: BBB.
The GSTSC successfully sold the bonds to refund certain outstanding Series 2007 bonds.
"The refunding will accelerate the expected final repayment of the bonds by approximately five years. Market reception for the bonds was excellent with substantial oversubscription across the yield curve. A wide variety of investors participated including bond funds, money managers, investment advisors, and insurance companies. As a result, Jefferies and Citigroup, the joint senior managers, were able to reduce yields by 2-12 basis points with interest rates ranging from 1.13% in 2018 to 3.25% in 2029. The TIC on the transaction is 2.89%," according to a spokesperson for the state.
Citi also priced San Jose, Calif.'s $628.89 million of airport revenue refunding bonds. The deal is rated A2 by Moody's and A-minus by S&P and Fitch except for the Series 2017A $29.1 million 2042 maturity which is insured by Build America Mutual and rated AA by S&P.
Goldman Sachs priced the New Jersey Turnpike Authority's $600 million of Series 2017A turnpike revenue bonds on Wednesday. The deal is rated A2 by Moody's, A-plus by S&P and A by Fitch.
JPMorgan Securities priced the New York City Housing Development Corp.'s $122.94 million of Series 2017 A-1-A multi-family sustainable neighborhood housing bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P. Wells Fargo Securities priced the NYC HDC's $24.5 million of taxable Series 2017 B-1 multi-family housing revenue bonds. The deal is also rated Aa2 by Moody's and AA-plus by S&P.
Morgan Stanley priced the Massachusetts Development Finance Agency's $170.11 million of revenue refunding bonds for Suffolk University. The deal is rated Baa2 by Moody's and BBB by Fitch.
RBC Capital Markets priced the Glendale Community College District, Calif.'s $122 million of Series A election of 2016 general obligation bonds. The deal is rated Aa2 by Moody's and AA-minus by S&P.
Bank of America Merrill Lynch priced the El Paso County Hospital District, Texas' $106.8 million of Series 2017 GO refunding bonds. The deal is rated A2 by Moody's, A-minus by S&P and AA-minus by Fitch.
In the competitive arena, Anne Arundel County, Md., sold $237.75 million of bonds in two separate sales. BAML won the $173.14 million of Series 2017 consolidated general improvements GOs with a true interest cost of 3.47%. Citigroup won the $64.61 million of Series 2017 consolidated general improvements refunding GOs with a TIC of 2.42%. Both deals are rated Aa1 by Moody's and triple-A by S&P.
Guilford County, N.C., sold $196.27 million of bonds in two separate sales. Citi won the $169.07 million of Series 2017B public improvement GOs with a TIC of 2.79%. Robert W. Baird won the $27.2 million of Series 2017A public improvement GOs with a TIC of 2.74%. Both deals are rated triple-A by Moody's, S&P and Fitch.
The Puyallup School District No. 3, Wash., competitively sold $181.23 million of Series 2017 GOs under the Washington state school district credit enhancement program. JPMorgan Securities won the bonds with a TIC of 3.36%. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $3.36 billion to $12.54 billion on Friday. The total is comprised of $2.94 billion of competitive sales and $9.60 billion of negotiated deals.
Lipper: Muni Bond Funds Report Inflows
Investors in municipal bond funds continued to put cash back into the funds in the latest week, according to Lipper data released late Thursday.
The weekly reporters saw $265.041 million of inflows in the week ended March 29, after inflows of $173.473 million in the previous week.
The four-week moving average was in the green at positive $61.827 million, after being in the red at negative $90.990 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 had inflows, gaining $251.561 million in the latest week after rising $251.521 million in the previous week. Intermediate-term funds had outflows of $15.992 million after outflows of $18.088 million in the prior week.
National funds had inflows of $358.965 million after inflows of $196.828 million in the previous week. High-yield muni funds reported inflows of $277.761 million in the latest reporting week, after inflows of $222.906 million the previous week.
Exchange traded funds saw inflows of $141.468 million, after inflows of $118.730 million in the previous week.
