Top-shelf municipal bonds were weaker at mid-session, according to traders, while the last of the week's surge of supply came to market on Thursday.
Secondary Market
The 10-year benchmark muni general obligation yield rose as much as one basis point from 2.34% on Wednesday, while the yield on the 30-year GO increased as much as two basis points from 3.09%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mostly flat on Thursday. The yield on the two-year Treasury held at 1.24% from 1.24% on Wednesday, while the 10-year Treasury yield rose to 2.53% from 2.47%, and the yield on the 30-year Treasury bond remained at 3.10%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 92.9% compared to 94.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 99.5%, versus 99.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 45,617 trades on Wednesday on volume of $11.95 billion.
Primary Market
Citigroup priced the Mayor and City Council of Baltimore, Md.'s $237.96 million of Series 2017A-D revenue and revenue refunding bonds for water and wastewater projects on Thursday.
The $155.81 million of Series 2017A subordinate project revenue bonds were priced as 5s to yield from 1.39% in 2019 to 3.46% in 2036, 3.53% in 2041 and 3.58% in 2046. A 2018 maturity was offered as a sealed bid.
The $10.13 million of Series 2017B subordinate project refunding revenue bonds were priced as 5s to yield from 1.93% in 2022 to 2.82% in 2028.
The $28.17 million of Series 2017C subordinate project refunding revenue bonds were priced to yield from 1.39% with a 3% coupon in 2019 to 3.50% with a 5% coupon in 2038.
The $43.86 million of Series 2017D forward delivery refunding revenue bonds were priced as 5s to yield from 1.79% in 2021 to 3.40% in 2035. A 2017 maturity was offered as a sealed bid.
The deal is rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings.
Since 2007, Baltimore has issued about $2.68 billion of debt, with the largest issuance occurring in 2013 when it sold roughly $800 million of debt. The city did not come to market at all in 2012.
In the competitive arena, the Sheldon Independent School District, Texas, sold $100.71 million of Series 2017 unlimited general obligation tax school building and refunding bonds.
Bank of America Merrill Lynch won the deal with a true interest cost of 3.48%. Pricing details were not immediately available.
The deal, which is backed by the Permanent School Fund, is rated triple-A by Moody's.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.50 billion to $7.49 billion on Thursday. The total is comprised of $1.42 billion of competitive sales and $6.07 billion of negotiated deals.
NYC Sets $800M GO Sale for Feb. 7
New York City will sell about $800 million of general obligation refunding bonds on Tuesday, Feb. 7 after a two-day retail order period on the previous Friday and Monday, the city announced on Thursday.
The bonds will be sold through the city's underwriting syndicate, led by book-running senior manager Citigroup. Bank of America Merrill Lynch, Goldman, Sachs, Jefferies, JPMorgan, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, Siebert Cisneros Shank and Wells Fargo Securities will serve as co-senior managers.
Tax-Exempt Money Market Fund Inflows
Tax-exempt money market funds experienced inflows of $488.2 million, bringing total net assets to $131.30 billion in the week ended Jan. 23, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $829.3 million to $130.81 billion in the previous week.
The average, seven-day simple yield for the 233 weekly reporting tax-exempt funds were unchanged from 0.23% in the previous week.
The total net assets of the 863 weekly reporting taxable money funds increased $17.03 billion to $2.523 trillion in the week ended Jan. 24, after an outflow of $26.25 billion to $2.506 trillion the week before.
The average, seven-day simple yield for the taxable money funds was flat from 0.26%.
Overall, the combined total net assets of the 1,099 weekly reporting money funds rose $17.52 billion to $2.654 trillion in the week ended Jan. 24 after outflows of $27.08 billion to $2.637 trillion in the prior week.
