NYC TFA, Calif. top $3.6B holiday slate

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Issuers in New York City and California will dominate next week’s new issue calendar, which is coming during the holiday-shortened trading week. Financial markets are closed on Monday in observance of Labor Day and trading will resume on Tuesday morning.

Ipreo forecasts weekly bond volume will fall to $3.6 billion from a revised total of $4.5 billion in the prior week, according to updated data from Thomson Reuters. The calendar is composed of $1.6 billion of negotiated deals and $2 billion of competitive sales.

Primary market
There are several big bond issues awaiting buyers when they return from the long weekend.

The New York City Transitional Finance Authority will issue $1.4 billion of future tax secured subordinate Fiscal 2019 bonds.

On Thursday, Loop Capital Markets will price the TFA’s $900 million of tax-exempt fixed-rate bonds after a two-day retail order period. Additionally, the TFA is set to sell $500 million of taxable bonds in two competitive sales on Thursday.

The financial advisors are Public Resources Advisory Group and Acacia Financial Group and the bond counsel are Norton Rose and Bryant Rabbino.

The deals are rated Aa1 by Moody’s and AAA by S&P Global Ratings and Fitch Ratings.

Proceeds from the sale will be used to fund capital projects, with the exception of proceeds from about $150 million of the tax-exempt fixed-rate bonds, which will be used to convert outstanding floating-rates into fixed-rates.

Also on Thursday, California is competitively selling over $989 million of general obligation and GO refunding bonds in three sales.

The offerings consisting of $516.035 million of tax-exempt various purpose GO refunding bonds, Bidding Group C, $338.38 million of tax-exempt various purpose GOs, Bidding Group B, and $134.855 million of taxable various purpose GO and refunding bonds, Bidding Group A.

The financial advisor is Public Resources Advisory Group and the bond counsel is Orrick Herrington & Sufcliffe.

The deals are rated Aa3 by Moody’s and AA-minus by S&P and Fitch.

Proceed from the sales will be used to refund certain outstanding debt of the state.

There are several higher education deals of note on the upcoming calendar.

Wells Fargo Securities is expected to price the University of Chicago’s $400 million of Series 2018C taxable fixed-rate bonds on Thursday.

The corporate CUSIP deal is rated Aa2 by Moody’s, AA-minus by S&P and AA-plus by Fitch.

Stifel is set to price the University of North Dakota’s $92.99 million of tax-exempt and taxable green certificates of participation on Thursday form an infrastructure energy improvement project.

The deal is rated A1 by Moody’s.

And Goldman Sachs is set to price Purdue University’s $90 million of student fee bonds.

The deal is rated AAA by Moody's and S&P.

In the housing sector, Barclays Capital is expected to price the New Jersey Housing and Mortgage Finance Agency’s $165 million of multi-family revenue bonds.

The deal is rated AA-minus by S&P.

Bond Buyer 30-day visible supply at $8.09B
The Bond Buyer's 30-day visible supply calendar increased $1.39 billion to $8.09 billion for Friday. The total is comprised of $3.92 billion of competitive sales and $4.17 billion of negotiated deals.

Week's actively traded issues
Some of the most actively traded munis by type in the week ended Aug. 31 were from Puerto Rico and Texas issuers, according to Markit.

In the GO bond sector, the Puerto Rico 8s of 2035 traded 39 times. In the revenue bond sector, the Texas 4s of 2019 traded 238 times. And in the taxable bond sector, the Puerto Rico Sales Tax Financing Corp. 6.35s of 2039 traded 18 times.

Week's actively quoted issues
Puerto Rico, Pennsylvania and California names were among the most actively quoted bonds in the week ended Aug. 31, according to Markit.

On the bid side, the Puerto Rico Aqueduct and Sewer Authority revenue 5.25s of 2042 were quoted by 92 unique dealers. On the ask side, the Allegheny County Sanitation Authority, Pa., revenue 5s of 2045 were quoted by 297 dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 18 dealers.

Secondary market
Municipal bonds were stronger on Friday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the two- to 30-year maturities and rose less than a basis point in the one-year maturity.

High-grade munis were also stronger, with yields calculated on MBIS’ AAA scale falling as much as three basis points in two- to 30-year maturities and rising less than a basis point in the one-year maturity.

Municipals were stronger 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 falling as much as one basis point.

Treasury bonds were stronger as stock prices traded mixed.

On Thursday, the 10-year muni-to-Treasury ratio was calculated at 85.5% while the 30-year muni-to-Treasury ratio stood at 100.9%, 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 38,174 trades on Thursday on volume of $11.70 billion.

California, Texas and New York were the municipalities with the most trades, with Golden State taking 13.722% of the market, the Lone Star State taking 14.071% and the Empire State taking 9.251%.

Lipper: Muni bond funds saw inflows
Investors in municipal bond funds once again showed confidence and put cash into the funds during the latest reporting week, according to Lipper data released on Thursday.

The weekly reporters saw $212.052 million of inflows in the week ended Aug. 29, after inflows of $378.371 million in the previous week.
Exchange traded funds reported inflows of $57.435 million, after inflows of $82.831 million in the previous week. Ex-ETFs, muni funds saw $154.617 million of inflows, after inflows of $295.540 million in the previous week.

The four-week moving average remained positive at $416.251 million, after being in the green at $271.150 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 $368.851 million in the latest week after inflows of $348.356 million in the previous week. Intermediate-term funds had inflows of $97.445 million after inflows of $90.321 million in the prior week.

National funds had inflows of $194.565 million after inflows of $338.960 million in the previous week. High-yield muni funds reported inflows of $222.454 million in the latest week, after inflows of $240.718 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.

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Primary bond market Secondary bond market Municipal bond funds New York City Transitional Finance Authority State of California State of Texas Puerto Rico Aqueduct & Sewer Authority Puerto Rico Sales Tax Financing Corp (COFINA) Commonwealth of Puerto Rico New Jersey Housing & Mortgage Finance Agency University of Chicago
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