Top quality municipal bond prices were higher on Friday morning, according to traders, by anywhere from one to three basis points.
Treasuries were higher in early morning action, as municipal bond traders and other market participants are turning their attention to next week's supply, which from an early look – seem to contain more large deals than this week.
An early look at the calendar shows eight deals $300 million or greater scheduled to priced next week.
Secondary Market
On Friday morning, the yield on the 10-year benchmark muni general obligation was as much as one basis point lower from 2.19% on Thursday, while the 30-year was anywhere from one to three basis points lower from 3.19%, according to a morning read of Municipal Market Data's triple-A scale.
Treasuries were higher on Friday morning, the two-year Treasury yield was down to 0.86% from 0.87% on Thursday, while the 10-year Treasury yield was lower at 2.29% from 2.32% and the 30-year yield dipped to 3.07% from 3.09% on Thursday.
The 10-year muni to Treasury ratio was calculated on Thursday 94.7% versus 94.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 103.3% compared to 103.2%, according to MMD.
The Week's Primary Market
In a somewhat strange week with little volume and a mid-week pause, there is still a lot to talk about.
On Tuesday, what was supposed to be the biggest deal of the week – a $1.75 billion revenue bond offering from All Aboard Florida – got delayed.
AAF's planned 235-mile intercity express train from Miami to Orlando received a private-activity bond allocation from the U.S. Department of Transportation. The project continues to fight state and federal legal challenges brought by Martin and Indian River counties where the train will pass through but not stop. The deal was not rated and the plan was to sell to qualified institutional buyers and accredited investors.
Market sources indicated this deal is considered "day-to-day," so market participants will have to keep a watch out.
JPMorgan priced the Central Texas Regional Mobility's $371.07 million of senior lien revenue and refunding put bonds. The deal is rated Baa2 by Moody's and BBB-plus by S&P.
BAML priced the Miami-Dade County school board's $343.92 million of certificates of participation. The deal is rated A1 by Moody's and A-minus by S&P.
Bank of America Merrill Lynch won the Washington, Md., suburban sanitation district's $150.67 million of consolidated public improvement refunding bonds, with a true interest cost of 2.15%. The deal is rated triple-A by Moody's, S&P and Fitch Ratings.
The New Jersey Environmental Infrastructure Trust sold three separate issues totaling roughly $140.69 million on Tuesday. Wells Fargo won the largest of the three - $117.475 million of refunding bonds, Series 2015B-R2, which are subject to alternative minimum tax, with a TIC of 1.99%.
PNC Capital Markets won the $13.905 million deal with a TIC of 2.30% and Citi won the $9.31 million deal with a TIC of 2.79%. All three deals were rated triple-A by Moody's, S&P and Fitch.
JPMorgan priced Kershaw County, S.C., public schools foundation's $102.235 million of installment purchase refunding revenue bonds. The deal is rated A1 by Moody's and A-minus by S&P and the 2026-3031 maturities are insured by Build America Mutual.
On Thursday, 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 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%. 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, $154.085 million of educational facilities revenue refunding bonds, Series 2015B, was won by Wells Fargo Securities with a TIC of 2.65%.
The $53.245 million of educational facilities revenue bonds, series 2015A, was also won by Wells Fargo, with a TIC of 3.24%. Both deals are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,531 trades on Thursday on volume of $8.297 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.890 billion to $11.46 billion on Friday. The total is comprised of $3.22 billion competitive sales and $8.24 billion of negotiated deals.
