The tax-exempt market posted significant losses for the first time in a week, after four days of mostly steady trading, as yields jumped as much as seven basis points.
Market participants said new issues in the primary market were received well with buyers focused on shorter maturing bonds. Sellers emerging in the secondary market pushed yields higher, particularly on longer maturities.
Selling pressure started early Tuesday morning and continued as the day progressed.
"There are huge cuts," a New York trader said. "There are lots of bid lists out there for munis." The trader said munis followed Treasury yields higher.
"Bid lists were significant this morning," a second New York trader said. "Bids are weaker but not many customers are hitting bids, especially on the long end.
In the primary market, demand was strong for debt maturing within five years, this trader said.
In repricing, Goldman, Sachs & Co. lowered yields on $238 million Maryland Health and Higher Educational Facilities Authority revenue bonds for the Johns Hopkins Health System as much as 10 basis points on bonds maturing between 2016 and 2029. The biggest move was in bonds maturing inside six years. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Yields ranged from 0.83% with a 3% coupon in 2016 to 5.13% with a 5% coupon in 2043. The bonds are callable at par in 2023.
RBC Capital Markets held a preliminary pricing for $196.4 million of JEA electric system bonds, following a retail order period Monday.
The first series of $33 million of revenue bonds is rated Aa2 by Moody's, AA-minus by Standard & Poor's, and AA by Fitch. Yields ranged from 0.56% with a 3% coupon in 2015 to 4.48% with a 5% coupon in 2030. The bonds are callable at par in 2023.
The second series of $163.4 million of subordinated revenue bonds is rated Aa3 by Moody's, A-plus by Standard & Poor's, and AA by Fitch. Yields ranged from 0.61% with a 3% coupon in 2015 to 5% priced at par in 2035.
Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2018 except for those maturing between 2019 and 2022. Bonds maturing between 2023 and 2027 are callable at par in 2023.
Yields were lowered between five and seven basis points on bonds maturing between 2015 and 2019. In retail pricing Monday, the underwriter stopped taking orders on shorter-maturing bonds due to demand.
Raymond James & Associates priced for retail $383.6 million of Reedy Creek, Fla., Improvement District ad valorem tax bonds, rated Aa3 by Moody's, A-plus by Standard & Poor's, and AA-minus by Fitch. Institutional pricing is expected Wednesday.
Yields on the first series of $344.2 million ranged from 4.10% priced at par in 2026 to 5% priced at par in 2038. Bonds maturing between 2020 and 2025, in 2027, 2028, 2030, 2031, and in 2033 were not offered for retail. The bonds are callable at par in 2023.
Yields on the second series of $39.4 million of refunding bonds, ranged from 0.68% with a 3% coupon in 2015 to 3.74% with a 5% coupon in 2024. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.
Yields on Phoenix, Ariz., Civic Improvement Corp. 5s of 2020 jumped five basis points to 2.88% and Georgia 5s of 2029 increased three basis points to 3.70%.
Yields on JobsOhio Beverage System 5s of 2038 and California 5s of 2043 rose two basis points each to 5.11% and 4.93%, respectively.
Yields on New Jersey's Tobacco Settlement Financing Corp. 5s of 2041 and New York City Transitional Finance Authority 5s of 2042 rose one basis point each to 7.53% and 4.68%, respectively.
Tuesday, yields on the Municipal Market Data scale ended as much as seven basis points higher. The 10-year yield rose seven basis points to 2.79% and the 30-year yield increased five basis points to 4.33%. The two-year finished flat at 0.43% for the 20th consecutive session.
Yields on the Municipal Market Advisors scale also ended as much as seven basis points higher. The 10-year and 30-year yields rose six basis points each to 2.95% and 4.40%, respectively. The two-year yield was unchanged at 0.54% for the fifth session.
