If anyone had any doubts about the market's ability to digest the largest weekly issuance influx in nearly two years going into the week, those can be put to bed now.
"The market did not blink or skip a beat at all and all of the issuance we saw this week was easily absorbed," said one New York trader. "Muni investors are still hungry and want more, good thing there looks to be around another $12 billion next week."
Bank of America priced Metropolitan Nashville Airport Authority’s (A2/NR/A) $769.65 million of subordinate revenue bonds, featuring alternative minimum tax and non-AMT bonds.
“I thought the pricing was really strong,” said one Southern trader. “The levels on both the AMT and non-amt bonds seemed really tight, especially for subordinate bonds.”
He added that the authority is well managed, the credit is strong and the airport has seen really robust growth in conjunction with Nashville’s growth.
“So it is not terribly surprising the deal could be priced aggressively,” he said.
Goldman Sachs priced San Diego County Regional Transportation Commission’s ( /AAA/AAA) $442.40 million of sales tax revenue limited tax and taxable bonds.
JP Morgan priced Hampton Roads Transportation Accountability Commission’s (Aa3/A+-NR) $414.35 million of transportation fund intermediate lien bond anticipation notes.
RBC Capital Markets priced California Infrastructure and Economic Development Bank’s (A1/A+/AA) $278.64 million of lease revenue climate certified green bonds for the state teachers’ retirement headquarters expansion.
JP Morgan priced New York City Housing development Corp.’s (Aa2.AA+/NR) $243.17 million of multifamily housing revenue bonds.
JP Morgan priced New Mexico Hospital Equipment Loan Council’s (Aa3/AA/AA) $221.895 million of hospital system revenue bonds for Presbyterian Healthcare Services.
UBS priced Bexar County, Texas’ (Aaa/AAA/AAA) $125.01 million of limited tax refunding and flood control tax refunding bonds.
Metropolitan Washington Airports Authority receives $8.1B in orders
The MWAA sold $1.27 billion of bonds on Wednesday and received $8.1 billion in orders, as the deal was 5.4 times oversubscribed.
“The deal saw over 100 different individual investors,” said Andrew Roundtree, CPA and vice president for finance and CFO for the MWAA. “Gross debt service savings through 2043 are $619.3 million. This structuring will allow us to maintain level debt service after 2033, which was one our objectives.”
New York State Housing Finance Agency receives $1.1B of orders
On Wednesday, the NYS HFA sold $444.115 million of bonds and received nearly $1.1 billion of bonds. The transaction is expected to finance approximately 2,231 units of affordable housing within 10 counties throughout the state.
The order book consisted of $896 million of institutional orders and $191 million retail orders, of which $168 million was on behalf of New York individuals. The transaction received orders from 40 different institutional and professional retail accounts.
The bonds included a Sustainability Bonds designation and garnered orders from six ESG-focused institutional accounts, of which three of the accounts are newly tax-exempt ESG funds (environmental, social and governance).
The agency was able to reduce the offered rates on their tax-exempt bonds by as much as 10 basis points and by as much as 14 basis points on the taxable bonds.
“The demand for the Agency’s bonds remains strong and interest has grown thanks in part to the sustainable nature of our affordable housing financings,” said a spokesman from the Agency.
Secondary market
Munis were stronger on the MBIS benchmark scale, with yields falling by two basis points in the 10-year maturity and by four basis points in the 30-year maturity. High-grades were also stronger, with yields on MBIS AAA scale decreasing by less than one basis point in both the 10-year maturity and 30-year maturities.
On Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on both the 10-year GO and 30-year was lower by one basis point to 1.46% and 2.05%, respectively.
The 10-year muni-to-Treasury ratio was calculated at 81.2% while the 30-year muni-to-Treasury ratio stood at 91.3%, according to MMD.
Treasuries were mostly higher and stocks were mixed. The Dow Jones Industrial Average was higher by about 0.01%, the S&P 500 Index gained 0.14% and the Nasdaq declined by 0.07%.
The Treasury three-month was yielding 1.544%, the two-year was yielding 1.592%, the five-year was yielding 1.625%, the 10-year was yielding 1.798% and the 30-year was yielding 2.247%.
Muni money market funds see inflow
Tax-exempt municipal money market fund assets gained $584.1 million, raising their total net assets to $138.94 billion in the week ended Dec. 2, according to the Money Fund Report, a publication of Informa Financial Intelligence.
The average seven-day simple yield for the 187 tax-free and municipal money-market funds ticked up to 0.72% from 0.71% from the previous week.
Taxable money-fund assets were up $97.1 million in the week ended Dec. 3, bringing total net assets to $3.390 trillion. The average, seven-day simple yield for the 801 taxable reporting funds remained at 1.32% from the prior week.
Overall, the combined total net assets of the 988 reporting money funds increased $681.2 million to $3.529 trillion in the week ended Dec. 3.
Previous session's activity
The MSRB reported 41,228 trades Wednesday on volume of $15.35 billion. The 30-day average trade summary showed on a par amount basis of $11.04 million that customers bought $6.09 million, customers sold $2.99 million and interdealer trades totaled $1.94 million.
California, New York and Texas were most traded, with the Golden State taking 13.697% of the market, the Empire State taking 10.756% and the Lone Star State taking 10.674%.
The most actively traded security was the Metropolitan Pier and Exposition Authority, Illinois, revenue refunding 4s of 2050, which traded 20 times on volume of $48.3 million.
Bond Buyer indexes unchanged
The weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, remained at 3.62% from the week before.
The Bond Buyer's 20-bond GO Index of 20-year general obligation yields was unchanged from 2.77% the week before.
The 11-bond GO Index of higher-grade 11-year GOs was flat at 2.30% from the prior week.
The Bond Buyer's Revenue Bond Index was idle at 3.24% from the previous week.
The yield on the U.S. Treasury's 10-year note was slightly higher to 1.80% from 1.77% the week before, while the yield on the 30-year Treasury increased to 2.24% from 2.19%.
Treasury auctions announced
The Treasury Department announced these auctions:
- $16 billion 29-year 11-month 2 3/8% bonds selling on Dec. 12;
- $24 billion 9-year 11-month 1 3/4% notes selling on Dec. 10;
- $38 billion three-year notes selling on Dec. 9;
- $36 billion 182-day bills selling on Dec. 9; and
- $42 billion 91-day bills selling on Dec. 9.
Treasury auctions bills
The Treasury Department Thursday auctioned $40 billion of four-week bills at a 1.500% high yield, a price of 99.883333.
The coupon equivalent was 1.527%. The bid-to-cover ratio was 3.16.
Tenders at the high rate were allotted 48.49%. The median rate was 1.480%. The low rate was 1.470%.
Treasury also auctioned $35 billion of eight-week bills at a 1.520% high yield, a price of 99.763556.
The coupon equivalent was 1.549%. The bid-to-cover ratio was 3.18.
Tenders at the high rate were allotted 54.25%. The median rate was 1.490%. The low rate was 1.480%.
Gary E. Siegel contributed to this report.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation.
