New issue muni slate hits $7B
Municipal bond traders will see a healthy sized new issue calendar hit the market next week.
Ipreo forecasts weekly bond volume will rise to $7.05 billion from a revised total of $6.94 billion in the prior week, according to updated data from Thomson Reuters. The calendar is composed of $5.28 billion of negotiated deals and $1.77 billion of competitive sales.
Topping off the new issue calendar is the Texas Water Development Board’s $1.63 billion revenue bond deal.
Citigroup is set to price the deal for institutions on Tuesday after holding a one-day retail order period.
The sale is composed of $1.59 billion of Series 2018B state water implementation revenue fund for Texas revenue bonds and $35 million of Series 2018C taxables.
The deal is rated AAA by S&P Global Ratings and Fitch Ratings.
In the competitive arena, the Maryland Department of Transportation is selling $605 million of Series 2018 consolidated transportation bonds, second issue.
The financial advisors are PFM Financial Advisors and People First Financial Advisors; the bond counsel is Miles & Stockbridge.
The deal is rated Aa1 by Moody’s Investors Service, AAA by S&P and AA-plus by Fitch.
Wells Fargo Securities is expected to price Colorado’s $500 million of Series 2018A certificates of participation on Thursday.
The deal is rated Aa2 by Moody’s and AA-minus by S&P.
Bond Buyer 30-day visible supply at $8.18B
The Bond Buyer's 30-day visible supply calendar increased $411.1 million to $8.18 billion for Friday. The total is comprised of $2.32 billion of competitive sales and $5.86 billion of negotiated deals.
Week's actively traded issues
Some of the most actively traded munis by type in the week ended Sept. 14 were from California, Texas and Puerto Rico issuers, according to Markit.
In the GO bond sector, the California 5s of 2028 traded 21 times. In the revenue bond sector, the Texas 4s of 2019 traded 94 times. And in the taxable bond sector, the Puerto Rico Government Development Bank 5s of 2023 traded 17 times.
Week's actively quoted issues
Illinois, Ohio and California names were among the most actively quoted bonds in the week ended Sept. 14, according to Markit.
On the bid side, the Illinois taxable 5.877s of 2019 were quoted by 25 unique dealers. On the ask side, the Reynoldsburg, Ohio GO 3.6s of 2048 were quoted by 243 dealers. And among two-sided quotes, the California taxable 7.5s of 2034 were quoted by 27 dealers.
Municipal bonds were weaker on Friday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields rose as much as one basis point in the one- to 30-year maturities, except for the nine-year and 19-year maturities, where yields fell less than a basis point.
High-grade munis were mostly weaker, with yields calculated on MBIS' AAA scale rising as much as one basis point in most of the curve except for the seven- to 10-year maturities, where yields fell less than a basis point.
Municipals were weaker on Municipal Market Data’s AAA benchmark scale, which showed the yield on both the 10-year muni general obligation and the yield on 30-year muni maturity rising by as much as two basis points.
Treasury bonds were weaker as stock prices traded higher.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 85.3% while the 30-year muni-to-Treasury ratio stood at 101.3%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.
Previous session's activity
The Municipal Securities Rulemaking Board reported 41,915 trades on Thursday on volume of $15.336 billion.
California, New York and Texas were the municipalities with the most trades, with Golden State taking 17.598% of the market, the Empire State taking 10.717% and the Lone Star State taking 9.106%.
Lipper: Muni bond funds saw outflows
Investors in municipal bond funds remained cautious and again took cash out of the funds during the latest reporting week, according to Lipper data released on Thursday.
The weekly reporters saw $136.494 million of outflows in the week ended Sept. 12, after outflows of $181.441 million in the previous week.
Exchange traded funds reported outflows of $236.814 million, after outflows of $43.094 million in the previous week. Ex-ETFs, muni funds saw $100.319 million of inflows, after outflows of $138.348 million in the previous week.
The four-week moving average remained positive at $68.122 million, after being in the green at $215.252 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 had inflows of $121.885 million in the latest week after outflows of $127.634 million in the previous week. Intermediate-term funds had inflows of $81.138 million after inflows of $4.958 million in the prior week.
National funds had outflows of $106.754 million after outflows of $124.108 million in the previous week. High-yield muni funds reported inflows of $160.042 million in the latest week, after inflows of $15.431 million the previous week.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Ziad Saba at 212-803-6079 for more information.