Municipal bonds were stronger in early activity, according to traders, as the market eyes next week’s still healthy new issue calendar.
Secondary market
The yield on the 10-year benchmark muni general obligation fell two to four basis points from 2.16% on Thursday, while the 30-year GO yield declined one to three basis points from 3.01%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Friday. The yield on the two-year Treasury dropped to 1.30% from 1.34% on Thursday, while the 10-year Treasury yield declined to 2.35% from 2.40%, and the yield on the 30-year Treasury bond decreased to 3.00% from 3.04%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 90.1%, compared with 90.0% on Wednesday, while the 30-year muni to Treasury ratio stood at 99.1%, versus 99.0%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 43,282 trades on Thursday on volume of $14.51 billion.
Week’s primary market
Bank of America priced Cuyahoga County’s $915.8 million of Series 2017 hospital revenue bonds for the MetroHealth System. The deal is rated Baa3 by Moody’s Investors Service and BBB-minus by S&P Global Ratings and Fitch Ratings.
Citigroup priced the Houston Independent School District, Texas’ $848.74 million of Series 2017 limited tax schoolhouse and refunding bonds. The deal, backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.
Bank of America Merrill Lynch priced Hawaii’s $856.25 million of Series 2017 FK, FL, FM, FN, FO and FP refunding and taxable general obligation bonds. The deal is rated Aa1 by Moody’s, AA-plus by S&P and AA by Fitch.
Ramirez & Co. priced and repriced the New York Metropolitan Transportation Authority’s $682.12 million of Series 2017B dedicated tax fund climate bond certified green bonds. The deal is rated AA by S&P and Fitch.
Citigroup priced the Louisiana Public Facilities Authority’s $421.56 million of Series 2017 refunding revenue bonds for the Ochsner Clinic Foundation. The deal is rated A3 by Moody’s and A-minus by Fitch.
Barclays Capital priced the San Francisco Bay Area Rapid Transit District’s $386.16 million of general obligation green bonds. The deal is rated triple-A by Moody’s and S&P.
Morgan Stanley priced the city of Los Angeles’ $333.87 million of Series 2017A wastewater system subordinated revenue green bonds and Series 2017B refunding green bonds. The deal is rated AA by S&P, Fitch and Kroll Bond Rating Agency.
RBC Capital Markets priced the Dormitory of the State of New York's $304 million of school district revenue bonds.
Siebert Cisneros Shank priced the Oakland Unified School District, Calif.’s $221.44 million of Series 2017A Measure B and Series 2017B Measure J and Series 2017C general obligation refunding bonds. The deal is rated Aa3 by Moody’s, AA-minus by S&P and AAA by Fitch.
Citigroup priced Wisconsin’s $219.15 million of Series 2017A environmental improvement fund revenue bonds. The deal is rated AAA by S&P and Fitch.
Jefferies priced the Pennsylvania Housing Finance Agency’s $189.51 million of Series 2017-123 single-family mortgage revenue bonds. The deal is rated Aa2 by Moody’s and AA-plus by S&P.
Bank of America Merrill Lynch priced the city and county of Denver’s $185.39 million of Series 2017A water revenue bonds and Series 2017B green bonds. The bonds are being issued through Denver’s Board of Water Commissioners. The deal is rated triple-A by Moody’s, S&P and Fitch.
BAML priced and repriced the Monroe County Industrial Development Corp., N.Y., $151.95 million of Series 2017 tax-exempt revenue bonds for Rochester General Hospital. The deal is rated A-minus by S&P.
JPMorgan Securities priced the Illinois Finance Authority’s $136.32 million of Series 2017 revenue refunding bonds for the Ann and Robert H. Lurie Children’s Hospital of Chicago. The deal is rated AA-minus by S&P and AA by Fitch.
BAML priced the Hayward Area Recreation and Park District, Alameda County, Calif.’s $125 million of election of 2016 general obligation bonds. The deal is rated Aa1 by Moody’s and AA-plus by S&P.
In the competitive arena, the Metropolitan Water District of Southern California sold $245.17 million of Series 2017A subordinate water revenue refunding bonds. JPMorgan won the bonds with a true interest cost of 2.15%. The deal is rated AA-plus by S&P and Fitch.
Denton, Texas, sold $120 million of debt in two separate sales. Citigroup won the $90.96 million of Series 2017 certificates of obligation with a true interest cost of 3.34% and the $29.12 million of Series 2017 GO refunding and improvement bonds with a TIC of 2.73%. Both deals rate rated AA-plus by S&P and Fitch.
Bond Buyer visible supply
The Bond Buyer's 30-day visible supply calendar increased $1.74 billion to $13.63 billion on Friday. The total is comprised of $3.95 billion of competitive sales and $9.68 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds continued to put cash back into the funds in the latest week, according to Lipper data released late on Thursday.
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The weekly reporters saw $605.731 million of inflows in the week ended May 10, after inflows of $127.783 million in the previous week.
The four-week moving average was still in the green at positive $292.065 million, after being positive at $547.560 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 had inflows, gaining $355.772 million in the latest week after rising $21.355 million in the previous week. Intermediate-term funds had inflows of $104.229 million after outflows of $20.400 million in the prior week.
National funds had inflows of $635.1164 million after inflows of $205.904 million in the previous week. High-yield muni funds reported inflows of $179.829 million in the latest reporting week, after inflows of $36.671 million the previous week.
Exchange traded funds saw inflows of $30.237 million, after outflows of $21.160 million in the previous week.