Municipal bond issuance will plunge next week as market participants look at the upcoming monetary policy meeting of the Federal Open Market Committee and the looming end of the quarter.
Ipreo forecasts weekly bond volume will drop to $3.1 billion from a revised total of $6.39 billion in the prior week, according to updated data from Thomson Reuters. The calendar is composed of $1.87 billion of negotiated deals and $1.26 billion of competitive sales.
Primary market
In the competitive arena, Wisconsin is slated to sell the biggest deal of the week on Tuesday when is offers $260.565 million of Series 2018B general obligation bonds.
Proceeds of the sale will be used for various governmental purposes.
In the negotiated sector, the Bank of America Merrill Lynch is set to price the Dormitory Authority of the State of New York’s $150 million of Series 2018A revenue bonds on Tuesday after a one-day retail order period.
Ziegler is expected to price the Successor Agency to the Redevelopment Agency of Pomona, Calif.’s $130.435 million of taxable Series 2018BI tax allocation refunding bonds on Wednesday.
PNC Capital Markets is set to price the Ohio Higher Educational Facilities Commission’s $113.735 million of Series 2018 hospital revenue bonds for the University Hospital Health System.
Raymond James & Associates is set to price the New Orleans Aviation Board’s $109.24 million of special facilities revenue bonds and refunding bonds on Tuesday.
Bond Buyer 30-day visible supply at $5.43B
The Bond Buyer's 30-day visible supply calendar increased $554.8 million to $5.43 billion for Friday. The total is comprised of $1.98 billion of competitive sales and $3.45 billion of negotiated deals.
Secondary market
Municipal bonds were little changed on Friday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields rose less than one basis point in the one- to five-year and 14-year maturities, fell less than a basis point in the eight- to 11-year and 16- to 29-year maturities and remained unchanged in the six- and seven-year, 12- and 13-year, 15-year and 30-year maturities.
High-grade munis were mixed, with yields calculated on MBIS' AAA scale rising less than one basis point in the 12- to 16-year and 26- to 30-year maturities, falling less than a basis point in the one- to 11-year and 18- to 23-year maturities and remaining unchanged in the 17-year and 24- and 25-year maturities.
Municipals were steady 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 remaining unchanged.
Treasury bonds were weaker as stock prices traded mixed.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 83.5% while the 30-year muni-to-Treasury ratio stood at 100.2%, 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 41,079 trades on Thursday on volume of $12 billion.
California, Texas and New York were the municipalities with the most trades, with Golden State taking 17.557% of the market, the Lone Star State taking 12.193% and the Empire State taking 12.187%.
Week's actively traded issues
Some of the most actively traded munis by type in the week ended Sept. 21 were from Texas, California and Puerto Rico issuers, according to
In the GO bond sector, the Hidalgo County, Texas, 4s of 2043 traded 42 times. In the revenue bond sector, the Long Beach, Calif., 5s of 2020 traded 54 times. And in the taxable bond sector, the Puerto Rico Government Development Bank 5s of 2023 traded 18 times.
Week's actively quoted issues
Ohio, Kentucky and California names were among the most actively quoted bonds in the week ended Sept. 21, according to Markit.
On the bid side, the Ohio Air Quality Development Authority revenue 5.7s of 2020 were quoted by 40 unique dealers. On the ask side, the Kentucky revenue 4s of 2048 were quoted by 265 dealers. And among two-sided quotes, the California taxable 7.5s of 2034 were quoted by 12 dealers.
Lipper: Muni bond funds saw inflows
Investors in municipal bond funds reversed course and put cash into the funds during the latest reporting week, according to Lipper data released on Thursday.
The weekly reporters saw $140.850 million of inflows in the week ended Sept. 19 after outflows of $136.494 million in the previous week.
Exchange traded funds reported inflows of $35.766 million, after outflows of $236.814 million in the previous week. Ex-ETFs, muni funds saw $105.085 million of inflows, after inflows of $100.319 million in the previous week.
The four-week moving average remained positive at $8.742 million, after being in the green at $68.122 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 $134.403 million in the latest week after outflows of $121.885 million in the previous week. Intermediate-term funds had outflows of $80.745 million after inflows of $81.138 million in the prior week.
National funds had inflows of $158.227 million after outflows of $106.754 million in the previous week. High-yield muni funds reported inflows of $156.236 million in the latest week, after inflows of $160.042 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.
