The three remaining notable deals have all hit screens Thursday, coming from issuers in California, Virginia and Illinois.
Yields on top-quality municipal bonds were from one to three basis points higher on some maturities, according to traders, but yields on the majority of the maturities stayed steady.
Primary Market
Citi priced Springfield, Ill.'s $509.38 million of senior-lien electric revenue bonds, which will restructure debt for operating relief and generate traditional present value savings. The bonds were priced to yield from 1.26% with a 5% coupon in 2018 to 3.76% with a 5% coupon in 2034. A split 2040 term bond was priced as 5s to yield 3.79% and 3.76%. The deal is rated A3 by Moody's Investors Service and A by Standard and Poor's. The 2030 to 2034 and 2040 maturities are insured by Assured Guaranty Municipal Corp.
The California Public Works Board sold $223.15 million of lease revenue bonds for the Department of Corrections and Rehabilitation and California State Prison, Corcoran, and various buildings. Morgan Stanley won the bidding with a true interest cost of 3.16%. No other pricing information was immediately available. The jail bonds are rated A1 by Moody's, A-plus by S&P and A by Fitch Ratings.
The Virginia College Building sold two separate issues totaling roughly $207.33 million. The larger issue for $154.085 million of educational facilities revenue refunding bonds, Series 2015B, was won by Wells Fargo Securities with a TIC of 2.65%. The bonds were priced to yield from 1.44% with a 5% coupon in 2020 to 3.78% with a 3.625% coupon in 2038.
The $53.245 million of educational facilities revenue bonds, series 2015A, was also won by Wells Fargo, with a TIC of 3.24%. The bonds were priced to yield from 0.26% with a 5% coupon in 2016 to 3.828% with a 3.75% coupon in 2040. A 2045 term bond was priced to yield 3.89% with a 4% coupon.
Both deals are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Secondary Market
On Thursday, the yield on the 10-year benchmark muni general obligation was flat from Tuesday's 2.19%, while the 30-year GO was also unchanged at 3.19% from Tuesday, according to a read of Municipal Market Data's triple-A scale.
Treasuries were mostly higher Thursday at midday, as the yield on the two-year Treasury was flat at 0.87% from Tuesday. The 10-year Treasury yield was lower at 2.30% from 2.33% on Tuesday and the 30-year yield dipped to 3.09% from 3.10%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.5% versus 93.2% on Monday, while the 30-year muni to Treasury ratio stood at 103.2% compared to 102.8%, according to MMD.
CUSIP Request Volume Reverses 5-Month Slump
The volume of requests for new municipal CUSIP identifiers roared back in October, following five months of decline, CUSIP Global Services reported on Thursday. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, suggests a surge in new municipal and corporate bond issuance over the next several weeks.
Muni requests increased 20% in October, with a total of 1,111 new municipal bond identifier requests. This follows a drop of 11% in September, a drop of 16% in August, a drop of 19% in July, a 1% decline in June and a decrease of 3% in May.
On a year-over-year basis, however, muni requests are still up 22.2%, reflecting the first half's surge in issuance.
"Several factors have driven the turn-around in new CUSIP request volume this month, including the start of the fourth quarter and a new fiscal year for municipal issuers," said Gerard Faulkner, director of operations for CUSIP Global Services. "Guidance from the Federal Reserve has also played a role, giving issuers a clearer window of opportunity to issue new debt while interest rates remain low."
Regionally, issuers in Texas, New York and California accounting for 30% of all municipal bond demand for new CUSIP identifiers in October.
"What we're seeing in the current CUSIP issuance numbers is a 'dash for debt' among U.S. corporate and municipal issuers who are looking to raise fund ahead of an interest rate increase from the Fed," said Richard Peterson, senior director of global markets intelligence, S&P Capital IQ. "CUSIP request volumes will be instructive as we draw closer to a rate rise, offering us an early look at how capital markets might respond in a rising rate environment."
Muni Money Funds Gain $383M
Tax-exempt money market funds rose by $383 million in the week ended Nov. 11, increasing total net assets to $245.56 billion, according to The Money Fund Report, a service of iMoneyNet.com.
The gains were up slightly from the prior week when total net assets ended at $245.17 billion.
The average, seven-day yield for the 374 weekly reporting tax-free money market funds remained at 0.01% for the 132nd consecutive week, while the average maturity remained at 33 days.
Taxable money funds, meanwhile, added $7.23 billion in new cash as total net assets catapulted to $2.501 trillion in the week ended Nov. 10. The inflows compare to the prior week when taxable money funds ended with $2.494 trillion of total net assets.
The average seven-day yield for the 950 weekly reporting taxable money funds was 0.02% for the 43rd straight week, while the average maturity remained at 38 days.
Overall, the combined total net assets of the 1,324 weekly reporting money funds rose to $2.747 trillion in the week ended Nov. 10. After the arrival of $7.61 billion of inflows -- which is up from $2.739 trillion the prior week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.923 billion to $9.57 billion on Thursday. The total is comprised of $3.42 billion competitive sales and $6.15 billion of negotiated deals.
Christine Albano contributed to this report
