Municipal bonds were mixed at midday as new issues came to market, led by a competitive sale from a Texas issuer.
Primary market
Collin County, Texas, competitively sold $151.285 million of Series 2019 limited tax permanent improvement limited tax general obligation bonds on Wednesday.
Bank of America Merrill Lynch won the issue with a true interest cost of 3.0244%.
The financial advisors is Hilltop Securities; the bond counsel is Bracewell.
The county last competitively sold comparable bonds on May 16, 2011, when Raymond James bought $28.49 million of Series 2011 unlimited tax road bonds with a TIC of 3.5852%.
The deal is rated triple-A by Moody’s Investors Service and S&P Global Ratings.
In the negotiated sector, Wells Fargo Securities is expected to price the North Carolina Medical Care Commission’s $206.71 million of Series 2019A-D healthcare facilities revenue bonds for the Wake Forest Baptist Obligated Group. The deal is rated A2 by Moody’s and A by S&P.
Bank of America Merrill Lynch is set to price the San Francisco Bay Area Toll Authority’s $125 million of Series 2019S-H subordinate toll bridge revenue bonds. The deal is rated A1 by Moody’s and AA-minus by S&P and Fitch Ratings.
And RBC Capital Markets is expected to price the San Francisco City and County Airport Commission’s $125 million of special facilities lease revenue bonds for the SFO Fuel Co. on Wednesday. The deal consists of Series 2019A bonds subject to the alternative minimum tax and Series 2019B taxable bonds. The deal is rated A1 by Moody’s and A by S&P.
On Thursday, Louisiana will competitively sell $309.845 million of Series 2019A GOs. Proceeds will be used to finance various improvement projects.
The financial advisor is Lamont Financial Services; the bond counsel are Breazeale Sachse and Butler Snow. The deal is rated AA-minus by S&P and Fitch.
Wednesday’s bond sale
Texas
Bond Buyer 30-day visible supply at $5.42B
The Bond Buyer's 30-day visible supply calendar increased $906.7 million to $5.42 billion for Wednesday. The total is comprised of $2.83 billion of competitive sales and $2.59 billion of negotiated deals.
ICI: Muni funds see $2.99B inflow
Long-term municipal bond funds and exchange-traded funds saw a combined inflow of $2.985 billion in the week ended Feb. 13, the Investment Company Institute reported on Wednesday.
This followed an inflow of $2.961 billion from the tax-exempt mutual funds in the week ended Feb. 6.
Long-term muni funds alone saw an inflow of $2.928 billion after an inflow of $3.264 billion in the previous week while ETF muni funds saw an inflow of $57 million after an outflow of $303 million in the prior week.
Taxable bond funds saw combined inflows of $6.753 billion in the latest reporting week after experiencing inflows of $13.130 billion in the previous week.
ICI said the total combined estimated inflows out of all long-term mutual funds and exchange-traded funds were $8.507 billion for the week ended Feb. 13 after inflows of $17.448 billion in the prior week.
Secondary market
Municipal bonds were mixed Wednesday, according to a read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the seven- to 11-year and 19- to 25-year maturities, rose as much as a basis point in the one- to six-year, 12- to 18-year and 30-year maturities and remained unchanged in the 26- to 29-year maturities.
High-grade munis were also mixed according to MBIS, with muni yields falling as much as one basis point in the nine- to 11-year and 16- to 30-year maturities and rising as much as a basis point in the one- to eight-year and 12- to 15-year maturities.
Municipals were stronger on Refinitiv Municipal Market Data’s AAA benchmark scale, which showed the yield on both the 10-year muni general obligation and the 30-year muni maturity dipping as much as one basis point.
Treasury bonds were weaker as stock prices traded higher.
On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 79.7% while the 30-year muni-to-Treasury ratio stood at 100.3%, 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.
COFINA bonds trading
Some of the restructured Puerto Rico Sales Tax Financing Corp. bonds were again actively trading on Wednesday.
The COFINA restructured series capital appreciation 0% revenue bonds of July 1, 2033, dated Aug. 8, 2018, (principal amount of issuance of $260.418 million), were trading at a high price of 50.679 cents on the dollar and a low price of 48.216 cents, compared to high and low prices of 22.657 cents and 46.90 cents on Tuesday and to high and low prices of 49.195 cents and 47.836 cents on Friday, according to the Municipal Securities Rulemaking Board’s EMMA website.
Trading volume totaled $13.945 million in 29 trades on Wednesday compared to $55.763 million in 43 trades Tuesday and $14.255 million in seven trades on Friday, EMMA reported.
The COFINA restructured series capital appreciation 0% bonds of July 1, 2051, dated Aug. 8, 2018, (principal amount of issuance of $631.551 million), were trading at a high price of 14.857 cents on the dollar and a low price of 13.953 cents, compared to high and low prices of 14.808 cents and 13.748 cents on Tuesday and to high and low prices of 15.23 cents and 14.529 cents on Friday, according to EMMA.
Trading volume totaled $14.711 million in 24 trades on Wednesday compared to $85.419 million in 71 trades Tuesday and $55.5 million in 16 trades on Friday, EMMA reported.
The COFINA restructured series A1 5% bonds of July 1, 2058, dated Aug. 8, 2018, (principal amount of issuance of $3.479 billion), were trading at a high price of 98.054 cents on the dollar and a low price of 94.999 cents, compared to high and low prices of 98.284 cents and 94.959 cents on Tuesday and 98.637 cents and 95.055 cents on Friday, according to the Municipal Securities Rulemaking Board’s EMMA website.
Trading volume totaled $16.729 million in 28 trades compared to $140.463 million in 100 trades on Tuesday and $166.912 million in 49 trades last Friday, EMMA reported.
Previous session's activity
The Municipal Securities Rulemaking Board reported 40,925 trades on Tuesday on volume of $8.63 billion.
California, Texas and New York were the municipalities with the most trades, with the Golden State taking 14.313% of the market, the Lone Star State taking 11.564% and the Empire State taking 9.937%.
Treasury auctions floating rate notes
The Treasury Department Wednesday auctioned $18 billion of one-year 11-month floating rate notes with a high discount margin of 0.149%, at a 0.115% spread, a price of 99.934172. The bid-to-cover ratio was 2.70.
Tenders at the high margin were allotted 41.80%. The median discount margin was 0.135%. The low discount margin was 0.100%.
The index determination date is Feb. 11 and the index determination rate is 2.400%.
Gary E. Siegel contributed to this report.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation.
