Munis were unchanged Friday, traders said, as they looked ahead to a relatively light weekly calendar featuring issuers from Massachusetts, New York and California.
Primary Market
Municipal volume for the week ahead is estimated by Ipreo at $6.1 billion, up from the revised total of $4.7 billion sold in the past week, according to Thomson Reuters. The calendar consists of about $4.1 billion of negotiated deals and $2 billion of competitive sales.
According to Daniel Berger, senior market strategist at Thomson Reuters/MMD, the weekly average so far this year is around $7 billion.
"The calendar is pretty underwhelming overall, but there is a good mix of different types of offering as well as varying credits, including some big names," a New York trader said. "The demand is still extremely strong, so the issuance should be gobbled up with ease."
Citi is scheduled to be the lead bookrunner on the Massachusetts Water Resources Authority's $535 million of general revenue bonds on Thursday, following a one day retail order period. The deal is rated Aa1 by Moody's Investors Service and AA-plus by Standard and Poor's and Fitch Ratings.
Morgan Stanley is expected to price the California Infrastructure and Economic Development Bank's $414.21 million of clean water state revolving fund revenue green bonds on Wednesday, following a one day retail order period. The deal is rated triple-A by Moody's, S&P and Fitch.
Fitch's release on the ratings on the bonds cites the strong financial structure of California's Ibank:
"Our cash flow modeling demonstrates that the IBank's clean water state revolving fund (SRF) program can continue to pay bond debt service even with loan defaults well in excess of our 'AAA' liability rating stress hurdle, as produced using our Portfolio Stress Calculator."
The New York Transitional Finance Authority will be selling three competitive sales totaling $750 million of future tax secured subordinate bonds on Tuesday. The largest sale of the three is scheduled to be $500 million and will be tax-exempt. The other two series' will be taxable bonds, one series for $199.475 million and one for $50.525 million. The deal is rated Aa1 by Moody's.
Secondary Market
Prices of top shelf municipal bonds ended steady on Friday. The yield on the 10-year benchmark muni general obligation finished flat from 1.59% on Thursday, while the 30-year muni yield was unchanged from 2.54%, according to the final read of Municipal Market Data's triple-A scale.
Muni yields plunged over the past week. On Friday, April 1, the yield on the 10-year muni stood at 1.70% while the 30-year muni yield was at 2.68%.
U.S. Treasuries were narrowly mixed on Friday. The yield on the two-year Treasury was unchanged from 0.70% on Thursday, while the 10-year Treasury yield rose to 1.72% from 1.69% and the 30-year Treasury bond yield increased to 2.56% from 2.51%.
The 10-year muni to Treasury ratio was calculated at 92.6% on Friday compared with 94.3% on Thursday, while the 30-year muni to Treasury ratio stood at 99.5% versus 101.2%, according to MMD.
The Week's Most Actively Quoted Issues
Puerto Rico and California issues were among some of the most actively quoted names in the week ended April 8, according to data released from Markit.
On the bid side, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 17 unique dealers. On the ask side, the California State University revenue 4s of 2034 were quoted by 21 unique dealers. And among two-sided quotes, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 20 dealers.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended April 1 were in Puerto Rico, Texas and Florida,
In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 traded 53 times. In the revenue bond sector, the Tarrant County, Texas, Cultural Education Facilities Financing Corp. 4s of 2042 traded 71 times. And in the taxable bond sector, the Florida State Board pf Administration Finance Corp. 2.638s of 2021 traded 22 times, Markit said.
Muni Bond Funds See Inflows for 27th Straight Week
For the 27th week in a row, municipal bond funds reported inflows, according to Lipper data released Thursday.
Weekly reporting funds saw $505.885 million of inflows in the week ended April 6, after inflows of $783.896 million in the previous week, Lipper said. The four-week moving average remained positive at $742.822 million after being in the green at $745.914 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 also experienced inflows, gaining $424.721 million in the latest week after inflows of $519.825 million in the previous week. Intermediate-term funds had inflows of $205.411 million after inflows of $205.746 million in the prior week.
National funds had inflows of $391.385 million on top of inflows of $652.906 million in the previous week. High-yield muni funds reported inflows of $16.846 million in the latest reporting week, after inflows of $268.113 million the previous week.
However, exchange traded funds saw outflows of $135.237 million, after inflows of $86.080 million in the previous week.
