Top shelf municipal bonds rallied on Friday, traders said, with yields on some maturities falling by as much as 19 basis points to record lows after Britain voted to leave the European Union.

The yield on 10-year benchmark muni general obligation fell 16 to 19 basis points from 1.53% on Thursday, while the 30-year muni yield declined 15 to 18 basis points from 2.23%, according to a read of Municipal Market Data's triple-A scale.

"I expect business as usual for munis after the dust of today's rally settles. Despite a reset to lower yields, next week's new issue calendar should see the same strong demand experienced in recent weeks, with mutual fund inflows continuing in future weeks," said Janney Municipal Strategist Alan Schankel.

U.S. Treasuries were also rallying Friday. The yield on the two-year Treasury declined to 0.64% from 0.77% on Wednesday, while the 10-year Treasury yield dropped to 1.57% from 1.74% and the yield on the 30-year Treasury bond decreased to 2.42% from 2.56%.

U.S. equities were following European stocks lower. The Dow Jones Industrial Average was off about 2%, the S&P 500 was down around 2.25% and the Nasdaq was almost 3% lower. UK equities were off about 2.5% while stocks fell in Germany by over 6% and by more than 5% in France.

On Thursday, the 10-year muni to Treasury ratio was calculated at 88.1% compared to 89.1% on Wednesday, while the 30-year muni to Treasury ratio stood at 87.3% versus 87.7%, according to MMD.

Muni Volume Estimated at $8.2B

Total volume for next week is estimated by Ipreo at $8.18 billion, down from a revised total of $9.28 billion sold this week, according to data from Thomson Reuters.

There are $5.92 billion of municipal bond deals and $2.26 billion of competitive sales on the calendar for next week.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 36,986 trades on Thursday on volume of $14.34 billion.

Week's Most Actively Traded Issues

Some of the most actively traded issues by type in the week ended June 24 were from California, New York and Oregon, according to Markit.

In the GO bond sector, the Los Angeles 3s of 2017 were traded 177 times. In the revenue bond sector, the N.Y. MTA 4s of 2036 were traded 81 times. And in the taxable bond sector, the Port Morrow, Ore. Revenue 1.782s of 2021 were traded 14 times.

Week's Most Actively Quoted Issues

California, South Carolina and Puerto Rico issues were among the most actively quoted names in the week ended June 24, according to Markit.

On the bid side, the California taxable 7.55s of 2039 were quoted by 12 unique dealers. On the ask side, the South Carolina PSA revenue 5s of 2046 were quoted by 19 unique dealers. And among two-sided quotes, the Puerto Rico Commonwealth GO 8s of 2035 were quoted by 11 dealers.

Primary Market

There were plenty of deals on the slate this week for traders to sink their teeth into.

Morgan Stanley priced the city of Los Angeles' $1.46 billion of tax and revenue anticipation notes. Proceeds of the sale will be used to make prepayments to its police, fire and city employees' retirement system; another $400 million will go to the cash flow fund. The TRANs are rated MIG1 by Moody's Investors Service SP1-plus by S&P Global Ratings and F1-plus by Fitch Ratings.

Morgan Stanley also priced the New York Metropolitan Transportation Authority's $673.9 million of Series 2016B transportation revenue refunding bonds for institutions after a one-day retail order period. The issue was upsized from the retail order period's original amount of $543.66 million.

"We saw impressive demand from institutional investors as well as during the retail order period ... especially in the long-dated maturities," the MTA said in a statement. "This enabled us to increase the amount of debt issued to $673.9 million, which helped us to retire $758 million in bonds issued in 2007 and 2008, creating a net present value savings of 18.25%, or $138 million."

The deal is rated A1 by Moody's, AA-minus by S&P, A by Fitch and AA-plus by Kroll Bond Rating Agency.

And Morgan Stanley priced the New York State Housing Finance Agency's $302.69 million of Series 2016C affordable housing revenue bonds. The deal is rated Aa2 by Moody's.

Goldman Sachs priced Dallas, Texas's $540.35 million of waterworks and sewer system revenue refunding bonds in two series, consisting of $370.1 million of Series 2016A tax-exempts and $170.25 million of Series 2016B taxables. The deal is rated triple-A by S&P and AA-plus by Fitch.

Wells Fargo Securities priced the University of California Regents' $533.91 million of taxable and tax-exempt limited project revenue bonds. The issue is rated Aa3 by Moody's and AA-minus by S&P and Fitch

Barclays Capital priced the Connecticut Health and Educational Facilities Authority's $500 million of revenue bonds for Yale University. The deal is rated triple-A by Moody's and S&P.

RBC Capital Markets priced Bexar County's $352.88 million of Series 2016 limited tax refunding bonds and Series 2016 flood control tax refunding bonds. The deal was rated triple-A by Moody's, S&P and Fitch.

Bank of America Merrill Lynch priced the Colorado Health Facilities Authority's $376 million of hospital revenue bonds for the Adventist Health System/Sunbelt Obligated Group. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.

Citigroup priced Iowa's $265.93 million of Series 2016A IJobs Program special obligation refunding bonds. The deal is rated Aa2 by Moody's and AA by S&P.

BAML priced the Metropolitan Water District of Southern California's $239.06 million of Series 2016A water revenue refunding bonds. The deal is rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.

Bank of America Merrill Lynch priced the California Housing Finance Agency's $236.35 million of Series 2016A taxable home mortgage revenue bonds. The deal is rated A2 by Moody's and AA-minus by S&P.

Bank of America Merrill Lynch priced the Northampton County General Purpose Authority, Pa.'s $215.62 million of Series 2016A hospital revenue bonds for St. Luke's University Health Network. The deal is rated A3 by Moody's and A-minus by S&P.

RBC Capital Markets priced the Pennsylvania Housing Finance Agency's $214.27 million of Series 2016-120 single-family non-AMT mortgage revenue bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.

Citigroup priced the Imperial Irrigation District, Calif.'s $188.95 million of taxable and tax-exempt electric system refunding revenue bonds. The deal is rated AA-minus by S&P.

BAML priced the state of Michigan's $189.07 million of Series 2016A taxable GO school loan refunding bonds and Series 2016B tax-exempt GO environmental program refunding bonds. Both series are rated Aa1 by Moody's, AA-minus by S&P and AA by Fitch.

JPMorgan Securities priced the Reedy Creek Improvement District, Fla.'s $163.26 million of Series 2016A ad valorem tax bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.

RBC priced Frisco, Texas' $158.18 million deal, consisting of Series 2016 GO refunding and improvement bonds, Series 2016A combination tax and limited surplus revenue certificates of obligation, and Series 2016B taxable combination tax and limited surplus revenue certificates of obligation. The deal is rated Aa1 by Moody's and AA-plus by S&P.

Jefferies priced the Ohio Water Development Authority's $150 million of water development revenue bonds Fresh Water Series 2016B. The deal is rated triple-A by Moody's and S&P.

Citigroup priced the Orlando Utilities Commission's $142.84 million of Series 2016A utility system revenue refunding bonds subject to the alternative minimum tax. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.

JPMorgan also priced the Gilbert Water Resources Municipal Property Corp., Ariz.'s $115.94 million of Series 2016 senior lien utility system revenue and revenue refunding bonds. The deal is rated triple-A by S&P and AA-plus by Fitch.

Wells Fargo Securities priced the Port of Morrow, Ore.'s $115.05 million of taxable Series 2016-2 transmission facilities revenue bonds for the Bonneville Cooperation Project No. 5. The deal is rated Aa1 by Moody's and AA by Fitch.

BAML priced the Board of Governors of Wayne State University, Mich.'s $101.03 million of general revenue refunding bonds. The deal is rated Aa3 by Moody's and A-plus by S&P.

In the competitive arena, the Virginia College Building Authority sold $234.39 million of Series 2016A educational facilities revenue refunding bonds under the public higher education financing program. BAML won the bonds with a true interest cost of 2.11%. The deal is rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.

The state of Alaska sold $128.3 million of Series 2016B unlimited tax general obligation bonds. JPMorgan Securities won the deal with a TIC of 2.76%. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.

The New Mexico Finance Authority sold $116.51 million of Series 2016D senior lien public project revolving fund revenue bonds. Morgan Stanley won the issue with a TIC of 2.41%. The deal is rated Aa1 by Moody's and triple-A by S&P.

Hennepin County, Minn., sold $104.29 million of Series 2016A general obligation bonds. BAML won the GOs with a TIC of 2.93%. The deal is rated triple-A by S&P and Fitch Ratings.

In the short-term sector, BAML priced Wayne County, Mich.'s $171.3 million of taxable limited tax general obligation tax revenue notes. The notes are rated SP1 by S&P.

Houston, Texas, competitively sold $230 million of Series 2016 tax and revenue anticipation notes to nine groups. BAML won $50 million, JPMorgan won $50 million, Wells Fargo won $30 million, Raymond James won $25 million, Citi won $25 million, Barclays won $20 million, FTN Financial Capital won $10 million, Hutchinson Shockey won $10 million, and Mesirow Financial won $10 million.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $498.4 million to $9.87 billion on Friday. The total is comprised of $3.00 billion of competitive sales and $6.87 billion of negotiated deals.

Muni Bond Funds Again See Inflows

For the 38th straight week, municipal bond funds reported inflows, according to Lipper data released Thursday. Weekly reporting funds saw $1.442 billion of inflows in the week ended June 22, after inflows of $904.450 million in the previous week, Lipper said.

The four-week moving average remained positive at $918.028 million after being in the green at $795.129 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 $1.039 billion in the latest week after inflows of $695.817 million in the previous week. Intermediate-term funds had inflows of $240.123 million after inflows of $165.993 million in the prior week.

National funds had inflows of $1.304 billion on top of inflows of $767.037 million in the previous week. High-yield muni funds reported inflows of $321.166 million in the latest reporting week, after inflows of $323.779 million the previous week.

Exchange traded funds saw inflows of $184.881 million, after inflows of $83.241 million in the previous week.

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