The largest deals in the primary market priced Tuesday were met with strong demand, allowing underwriters to reprice bonds higher.
Yields in the secondary market also headed lower, though municipal bond traders said activity was light and selling pressure persisted.
One Chicago trader said some large institutional players sold bonds in the secondary to free up cash for new deals in the primary, while others held on to cash.
"There was a fair amount of bids-wanted today but not a lot of it traded," a Chicago trader said. "We have the smallest position in two years. Funds aren't participating. We are trying to find some crossover buyers but that's a challenge. There is nothing driving the market."
This trader said any activity continues to be focused on the short-end of the curve. "I will buy something at the right price but I'm not paying up for it. There continues to be front-end inquiry."
One New York trader said there were still sellers in the market. "Munis are still under pressure with all the redemptions," he said.
In the primary market, the week's largest deals priced, led by Citi pricing $1.1 billion of Ohio Turnpike and Infrastructure Commission revenue bonds.
The first series of $73.7 million is rated Aa3 by Moody's Investors Service, AA-minus by Standard & Poor's, and AA by Fitch Ratings. The bonds yield 4.85% with a 5% coupon in 2048. The bonds are callable at par in 2023.
The second series of $714.1 million is rated A1 by Moody's and A-plus by Standard & Poor's Fitch. Yields ranged from 2.19% with a 5% coupon in 2019 to 5.11% with a 5% coupon in 2048. The bonds are callable at par in 2023.
The third series of $145 million of capital appreciation bonds is rated A1 by Moody's and A-plus by Standard & Poor's and Fitch. Yields ranged from 6.10% with a 2036 maturity to 6.26% and 6.71% in a split 2043 maturity. Portions of bonds maturing between 2037 and 2043 are callable at par in 2023.
The fourth series of $145 million of convertible capital appreciation bonds is rated A1 by Moody's and A-plus by Standard & Poor's and Fitch. The bonds yielded 5.70% in 2034, 5.75% in 2035, and 5.80% in 2036. The bonds are callable at par in 2031.
JPMorgan priced $376.9 million of New York City general obligation bonds, rated Aa2 by Moody's and AA by Standard & Poor's and Fitch. The deal was upsized from the preliminary $277.2 million.
Yields on the first series of $359.3 million ranged from 0.97% with a 5% coupon in 2016 to 3.14% with a 5% coupon in 2023. Bonds maturing in 2015 were offered via sealed bid. The bonds are callable at par in 2023.
Yields on the second series of $17.6 million ranged from 0.97% with a 3% coupon in 2016 to 3.35% with a 5% coupon in 2024. Bonds maturing in 2014 and 2015 were offered via sealed bid. The bonds are callable at par in 2023.
Barclays priced and repriced $207.7 million of Georgia Private Colleges and Universities Authority revenue bonds for Emory University. The bonds are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.
Yields ranged from 0.25% with a 3% coupon in 2014 to 4.59% with a 5% coupon in 2043. The bonds are callable at par in 2023. Yields were lowered as much as nine basis points in repricing.
Barclays priced and repriced $124.4 million of Orange County Transportation Authority senior lien toll road revenue refunding bonds, rated A1 by Moody's, A by Standard & Poor's, and A-minus by Fitch.
Yields ranged from 0.38% with a 2% coupon in 2014 to 4.63% with a 5% and 4.5% coupon in a split 2030 maturity. The bonds are callable at par in 2023. Yields were lowered as much as 12 basis points in repricing.
Bank of America Merrill Lynch accelerated institutional pricing of $115.6 million of Wisconsin Health and Educational Facilities Authority revenue bonds for Aurora Health Care, rated A3 by Moody's and A by Fitch.
The bonds yielded 5.22% with a 5.125% coupon in 2031 and 5.37% with a 5.25% coupon in 2035. The bonds are callable at par in 2023. Yields were lowered three basis points on bonds maturing in 2031.
In the secondary market, trades compiled by data provider Markit showed strengthening.
Yields on Ohio's Buckeye Tobacco Settlement Financing Authority 5.875s of 2047 dropped 10 basis points to 8.05% and Connecticut 5s of 2022 fell four basis points to 2.87%.
Yields on Dormitory Authority of the State of New York 5s of 2031 and Atlanta airport 5s of 2042 fell four basis points each to 4.20% and 5.16%, respectively.
Yields on Utah 5s of 2017 and New Jersey Turnpike Authority 5s of 2043 fell two basis points each to 1.03% and 4.76%, respectively.
Yields on California 5s of 2033 and Jacksonville, Fla., 5s of 2024 fell one basis point each to 4.60% and 3.70%, respectively.
Tuesday, yields on the Municipal Market Data scale ended as much as two basis points lower. The 10-year yield slipped two basis points to 2.67% and the 30-year yield fell one basis point to 4.20%. The two-year finished flat at 0.43% for the 10th consecutive session.
Yields on the Municipal Market Advisors scale also ended as much as two basis points lower. The 10-year and 30-year yields fell two basis points each to 2.87% and 4.27%, respectively. The two-year was steady at 0.54% for the fifth session.
Treasuries ended mostly weaker after a choppy session. The benchmark 10-year and 30-year yields rose one basis point each to 2.60% and 3.67%, respectively. The two-year was steady at 0.33%.
