Top-rated municipal bond were weaker at mid-session, as the last of the week's large muni deals came to market, led by competitive offerings from the Dormitory Authority of the State of New York.
Primary Market
In the competitive arena on Thursday, DASNY sold five issues totaling $703.86 million.
Bank of America Merrill Lynch won the $295.29 million of Series 2016A Group C tax-exempt general purpose state personal income tax revenue bonds with a true interest cost of 3.49%. The issue was priced to yield from 2.28% with a 5% coupon in 2037 to 2.63% with a 4% coupon in 2046.
Citigroup won the $242.84 million of Series 2016A Group B tax-exempt general purpose state personal income tax revenue bonds with a TIC of 2.84%. Pricing information was not immediately available.
JPMorgan Securities won the $77.92 million of Series 2016A Group A tax-exempt general purpose state personal income tax revenue bonds with a TIC of 2.84%. Pricing information was not immediately available.
JPMorgan won the $65.75 million of Series 2016C taxable general purpose state personal income tax revenue bonds with a TIC of 1.51%. Pricing information was not immediately available.
Roosevelt & Cross won the $22.07 million of Series 2016B tax-exempt general purpose state personal income tax revenue bonds with a TIC of 2.48%. Pricing information was not immediately available.
The DASNY deals are rated Aa1 by Moody's Investors Service and triple-A by S&P Global Ratings.
BAML priced the California's Health Facilities Financing Authority's $288.52 million of Series 2016B revenue bonds for Providence St. Joseph Health.
The $96.17 million of Series 2016B-1 bonds were priced at par to yield 1.25% in a 2026 bullet maturity. The bonds have a mandatory tender data of Oct. 1, 2020.
The $96.02 million of Series 2016B-2 bonds were priced as 4s to yield 1.53% in a bullet 2036 maturity. The bonds have a mandatory tender data of Oct. 1, 2024.
The $96.34 million of Series 2016B-3 bonds were priced at par to yield 2.00% in a bullet 2036 maturity. The bonds have a mandatory tender data of Oct. 1, 2025.
The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Also on Thursday, Morgan Stanley priced the Illinois Housing Development's $144.07 million of Series 2016B and C homeownership mortgage revenue bonds.
The $38.31 million of Series B bonds, subject to the alternative minimum tax, were priced at par to yield from 1.08% and 1.10% in a split 2017 maturity to 1.95% in 2022; a 2046 maturity was priced as 3 1/2s to yield 2.06%.
The $105.77 million of Series C non-AMT bonds were priced at par to yield from 1.50% and 1.60% in a split 2022 maturity to 2.40% and 2.45% in a split 2027 maturity; a 2031 maturity was priced at par to yield 2.90%, a 2035 maturity was priced at par to yield 3.10% and a 2046 maturity was priced as 3 1/2s to yield 1.92%.
The deal is rated Aa3 by Moody's and AA by S&P.
Jefferies is expected to price the New York Counties Tobacco Trust VI's $292.16 million of Series 2016 tobacco settlement pass-through bonds. The bonds are rated by S&P and range from A for the shorter maturities out to BBB on the longer end.
JPMorgan Securities is set to price the Indiana Finance Authority's $234.27 million of Series 2016A first lien wastewater utility revenue green bonds and Series 2016B second lien wastewater utility revenue refunding bonds.
The first-lien bonds are rated AA by S&P and A by Fitch while the second-lien bonds are rated AA-minus by S&P and A by Fitch.
Since 2006, the IFA has sold about $17.39 billion of debt, with the largest issuance occurring in 2011 when it sold about $2.58 billion. In the same period, the lowest amount it has issued in a year was in 2006, when it came to market with $675 million.
The IFA has sold more than $1 billion every year since 2007 with the exception of 2014 and during that span, three years saw more than $2 billion of issuance.
The Texas Transportation Commission's sale of $615.26 million of Series 2016A fixed-rate state highway fund first tier revenue bonds and $90 million of Series 2016B state highway fund first tier revenue refunding put bonds originally slated for Thursday has been postponed until early October.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $233.1 million to $14.77 billion on Thursday. The total is comprised of $4.36 billion of competitive sales and $10.41 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose by as much as one basis point from 1.44% on Wednesday, while the yield on the 30-year rose as much as two basis points from 2.13%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were weaker on Thursday after the European Central Bank hinted that further economic stimulus wasn't needed. The yield on the two-year Treasury rose to 0.76% from 0.74% on Wednesday, the 10-year Treasury yield gained to 1.59% from 1.54% and the yield on the 30-year Treasury bond increased to 2.29% from 2.23%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 93.8% compared to 90.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 95.4% versus 94.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,488 trades on Wednesday on volume of $10.19 billion.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $2.57 billion, bringing total net assets to $150.33 billion in the week ended Sept 5, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $6.43 billion to $152.90 billion in the previous week.
The average, seven-day simple yield for the 254 weekly reporting tax-exempt funds rose to 0.16% from 0.14% in the previous week.
The total net assets of the 874 weekly reporting taxable money funds decreased $42.80 billion to $2.513 trillion in the week ended Sept. 6, after an inflow of $5.60 billion to $2.556 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.11% from the week before.
Overall, the combined total net assets of the 1,128 weekly reporting money funds fell $45.38 billion to $2.664 trillion in the period ended Sept. 6, which followed an outflow of $826.5 billion to $2.709 trillion.
