Stronger market leads to bump in yields on week's top deal

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Municipals and Treasuries were stronger around midday, with the GOP releasing some details of its tax bill and ahead of President Trump’s expected nomination of Jerome Powell as Fed chair.

Primary market
Bank of America Merrill Lynch priced and repriced the Virginia Small Business Financing Authority’s $737 million of senior lien private activity refunding bonds for the Transform 66 P-3 Project. The bonds were repriced to yield 3.71% with a 5% coupon in 2047, 3.79% with a 5% coupon in 2049, 3.90% with a 5% coupon in 2052 and 4.00% with a 5% coupon in 2056. The deal is rated Baa3 by Moody’s Investors Service and BBB by Fitch Ratings.

At repricing yields were bumped eight basis points in the 2047 and 2049 maturities, seven basis points in 2052 and five points in 2056.

Since 2007, the authority has issued about $2.7 billion of debt with the most issuance before this year occurring in 2012 when it sold $905 million. It did not come to market in 2013, 2015 or 2016.

Santa Clara County, Calif., sold $294.105 million of general obligation refunding election of 2008 bonds competitively. The deal was won by Wells Fargo with a true interest cost of 3.03%. The bonds were priced to yield 0.95% with a 5% coupon in 2018 and from 1.12% with a 5% coupon in 2020 to 3.35% with a 3.25% coupon in 2039. The deal is rated AAA by S&P Global Ratings and AA-plus by Fitch.

Secondary market
Top-shelf municipal bonds were slightly stronger on Thursday around midday. The yield on the 10-year benchmark muni general obligation was as much as two basis points lower from 2.02% on Wednesday, while the 30-year GO yield was also as much as two basis points lower from 2.82%, according to a read of Municipal Market Data`s triple-A scale.

U.S. Treasuries were stronger on Thursday around lunchtime. The yield on the two-year Treasury dipped to 1.61% from 1.62%, the 10-year Treasury yield fell to 2.35% from 2.37% and yield on the 30-year Treasury bond slipped to 2.83% from 2.86%.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 83.2% compared with 84.6% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 98.6% versus 98.4%, according to MMD.

AP-MBIS 10-year muni at 2.314%, 30-year at 2.874%
The Associated Press-MBIS municipal non-callable 5% GO benchmark scale was slightly stronger in midday trading Thursday.

The 10-year muni benchmark yield fell 2.314% from 2.328% from the final read on Wednesday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year benchmark muni yield declined to 2.874% from 2.879%.

The AP-MBIS benchmark index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.

Tax-exempt money market funds see outflows
Tax-exempt money market funds experienced outflows of $133.1 million, lowering total net assets to $128.20 billion in the week ended Oct. 30, according to The Money Fund Report, a service of

This followed an inflow of $179.1 million to $128.33 billion in the previous week.

The average, seven-day simple yield for the 199 weekly reporting tax-exempt funds rose to 0.48% from 0.46% the previous week.

The total net assets of the 832 weekly reporting taxable money funds decreased $9.12 billion to $2.580 trillion in the week ended Oct. 31, after an inflow of $3.18 billion to $2.589 trillion the week before.

The average, seven-day simple yield for the taxable money funds increased to 0.70% from 0.69% the prior week.

Overall, the combined total net assets of the 1,031 weekly reporting money funds decreased $9.25 billion to $2.708 trillion in the week ended Oct. 31, after inflows of $3.36 million to $2.718 trillion in the prior week.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,074 trades on Wednesday on volume of $13.519 billion.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $854.9 million to $8.48 billion on Thursday. The total is comprised of $4.13 billion of competitive sales and $4.35 billion of negotiated deals.

Data appearing in this article from Municipal Bond Information Services, including the AP-MBIS municipal bond index, is available on the Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Primary bond market Secondary bond market Virginia Small Business Financing Authority County of Santa Clara, CA