Attention in the municipal market turned to the short-term sector on Thursday as seven groups won $1 billion of the New York Metropolitan Transportation Authority’s bond anticipation notes while money market funds saw a third straight week of inflows.
Primary market
The N.Y. MTA (MIG1/SP1/F1+/K1+) competitively sold its Series 2019B Subseries 2019B-1 transportation revenue BANs to BofA Securities, Citigroup, Goldman Sachs, JPMorgan Securities, Loop Capital Markets, Morgan Stanley and UBS Financial Services. The MTA also sold $200 million of Series 2019B Subseries 2019B-2 to Morgan Stanley with a bid of 4%, a premium of $4,844,000, an effective rate of 1.488470%.
Public Resources Advisory Group and Backstrom McCarley Berry were the financial advisors; Nixon Peabody and D. Seaton & Associates were the bond counsel.
Muni money market funds see inflows
Tax-exempt municipal money market fund assets jumped by $3.50 billion, with total net assets growing to $139.93 billion in the week ended May 13, according to the Money Fund Report, a publication of Informa Financial Intelligence. This marked the second consecutive week that flows have exceeded $3 billion.
The average seven-day simple yield for the 190 tax-free and municipal money-market funds dropped to 1.23% from 1.59% the prior week.
Taxable money-fund assets decreased $833.6 million in the week ended May 14, bringing total net assets to $2.912 trillion.
The average, seven-day simple yield for the 808 taxable reporting funds lowered to 2.04% from 2.06% last week.
Overall, the combined total net assets of the 998 reporting money funds increased $2.67 billion to $3.052 trillion in the week ended May 14.
Thursday’s note sales
Muni CUSIP requests increase
Municipal CUSIP requests rose 3% in April, signaling a slight uptick in new issuance over the near term.
The aggregate total of all municipal securities – including municipal bonds, long-term and short-term notes, and commercial paper — increased to 1,017 last month from 987 in March.
Drilling down, request for municipal bond identifiers gained in April to 843 from 807 in March, while long-term notes increased to 22 from 18 and short-term notes rose to 97 from 91 as commercial paper and other securities declined to 55 from 71 last month.
On a year-over-year basis, total muni requests rose 10% to 3,757 from 3,754 in the same period in 2018 while muni bond requests were up 9.3% to 3,066 from 2,805 in the first four months of last year.
Among top state issuers, CUSIPs for scheduled public finance offerings from Texas, New York and California were the most active in February, with Texas on top with 113 requests.
Secondary market
Munis were stronger on the
On Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on the 10-year and the 30-year rose by two basis points.
Treasuries were mixed as stock prices traded higher.
The 10-year muni-to-Treasury ratio was calculated at 71.7% while the 30-year muni-to-Treasury ratio stood at 83.8%, according to MMD.
“The ICE Muni Yield curve paused in the morning with yields rising about one basis point before continuing their decline from yesterday as continued demand and light supply persist,” ICE Data Service said in a Thursday comment. “The curve is led 1.5 basis points lower for the day by the five-year. High-yield sector continues to grind lower in yield as the search for name diversity continues. Taxables are 3.5 basis points higher.”
Previous session's activity
The MSRB reported the 30-day average trade summary showed on a par amount basis of $11.87 million that customers bought $5.80 million, customers sold $3.99 million and inter-dealer trades totaled $2.08 million.
California, New York and Texas were most traded, with the Golden State taking 13.719% of the market, the Empire State taking 9.452% and the Lone Star State taking 11.728%.
The most actively traded security was the Puerto Rico Government Development Bank Debt Recovery Authority taxable 7.5s of 2040, which traded 46 times on volume of $59.38 million.
Treasury auctions announced
The Treasury Department announced these auctions:
$11 billion 9-year 8-month 7/8% TIPs selling on May 23;
$26 billion 364-day bills selling on May 21;
$36 billion 182-day bills selling on May 20; and
$36 billion 91-day bills selling on May 20.
Treasury auctions bills
The Treasury Department Thursday auctioned $50 billion of four-week bills at a 2.365% high yield, a price of 99.816056. The coupon equivalent was 2.409%. The bid-to-cover ratio was 2.85.
Tenders at the high rate were allotted 77.09%. The median rate was 2.335%. The low rate was 2.320%.
Treasury also auctioned $35 billion of eight-week bills at a 2.355% high yield, a price of 99.633667. The coupon equivalent was 2.403%. The bid-to-cover ratio was 3.10.
Tenders at the high rate were allotted 89.48%. The median rate was 2.340%. The low rate was 2.320%.
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.
