Municipal bond buyers are looking forward to a more robust new issue slate for next week, with supply rising closer to average levels.
IHS Markit Ipreo forecasts weekly bond volume will increase to $5.7 billion from a revised total of $2 billion in the prior week, according to updated data from Refinitiv. The calendar is composed of $4.3 billion of negotiated deals and $1.4 billion of competitive sales.
Primary market
The week’s headliner will be Intel Corp., which will receive bond proceeds for new projects from the Chandler Industrial Development Authority of Arizona and the Oregon Business Development Commission.
Bank of America Merrill Lynch is expected to price the $500 million of Chandler IDA Series 2019 industrial development revenue bonds and $100 million of Oregon BDC Series 250 economic development revenue bonds on Wednesday.
In the competitive arena, the New York City Municipal Water Finance Authority is selling $390.415 million of Fiscal 2019 Series EE water and sewer system second general resolution revenue bonds in two offerings on Wednesday.
The deals consist of $275 million of Subseries EE-2 bonds and $115.415 million of Subseries EE-1 bonds.
The financial advisors are Lamont Financial Services and Drexel Hamilton. The bond counsel are Nixon Peabody and the Hardwick Law Firm.
The deals are rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Bond Buyer 30-day visible supply at $7.28B
The Bond Buyer's 30-day visible supply calendar increased $1.88 billion to $7.28 billion for Friday. The total is comprised of $2.11 billion of competitive sales and $5.17 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds kept their confidence and put cash into them in the latest week, according to Lipper data released on Thursday.
The weekly reporters saw $1.469 billion of inflows in the week ended Feb. 20 after inflows of $1.451 billion in the previous week.
Exchange traded funds reported inflows of $95.27 million, after inflows of $821,000 in the previous week. Ex-ETFs, muni funds saw inflows of $1.374 billion after inflows of $1.449 billion in the previous week.
The four-week moving average remained positive at $1.283 billion, after being in the green at $1.125 billion 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 had inflows of $919.663 million in the latest week after inflows of $998.428 million in the previous week. Intermediate-term funds had inflows of $377.716 million after inflows of $417.524 million in the prior week.
National funds had inflows of $1.291 billion after inflows of $1.240 billion in the previous week. High-yield muni funds reported inflows of $397.226 million in the latest week, after inflows of $452.473 million the previous week.
Secondary market
Municipal bonds were little changed Friday, according to a read of the MBIS benchmark scale. Benchmark muni yields fell less than one basis point in the one- to seven-year, 11- to 15-year and 22- to 30-year maturities, rose less than a basis point in the eight- and nine-year maturities and remained unchanged in the 10-year and 16- to 21-year maturities.
High-grade munis were also little changed, according to MBIS, with muni yields falling less than one basis point in the one- to eight-year and 12- and 13-year maturities, rising less than a basis point in the nine- and 10-year and 14- to 29-year maturities and remaining unchanged in the 11-year and 30-year maturities.
Investment-grade municipals were stronger on Refinitiv Municipal Market Data’s AAA benchmark scale, which showed the yield on the 10-year muni general obligation falling as much as one basis point while the yield on the 30-year muni maturity dropped as much as two basis points.
Treasury bonds were stronger as stock prices traded higher.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 78.7% while the 30-year muni-to-Treasury ratio stood at 99.0%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.
Previous session's activity
The Municipal Securities Rulemaking Board reported 42,015 trades on Thursday on volume of $13.73 billion.
California, Texas and New York were the municipalities with the most trades, with the Golden State taking 12.978% of the market, the Lone Star State taking 11.304% and the Empire State taking 9.72%.
Week's actively traded issues
Some of the most actively traded munis by type in the week ended Feb. 22 were from Puerto Rico issuers, according to
In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 traded 58 times. In the revenue bond sector, the Puerto Sales Tax Financing Corp. 5s of 2058 traded 148 times. In the taxable bond sector, the COFINA 4.55s of 2040 traded 33 times.
Week's actively quoted issues
Puerto Rico, Maryland and California names were among the most actively quoted bonds in the week ended Feb. 22, according to IHS Markit.
On the bid side, the COFINA revenue 5s of 2058 were quoted by 174 unique dealers. On the ask side, the Maryland GO 5s of 2025 were quoted by 158 dealers. Among two-sided quotes, the California taxable 7.55 of 2039 were quoted by 31 dealers.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation.
