The tax-exempt market showed slight improvement Wednesday afternoon as traders said yields didn’t rise as much as they did on Tuesday.
Retail participation was better in the secondary market and traders said one of the largest deals of the week in the primary, the $238 million New Jersey Economic Development Authority bond deal for Rutgers University, was doing well.
“It’s weaker but not as much as Tuesday,” a trader in Atlanta said. “There’s nothing dramatic today. It feels like there is more attention in the secondary but it’s not real active. There is a little bit more retail activity.”
Still, it’s a low issuance week with a light primary calendar and the week following a holiday tends to be slow, this trader said. “But we came back and Treasuries were down big Tuesday so this isn’t shaping up well.”
In other primary market deals, Wells Fargo priced $94.9 million of Board of Regent of Texas A&M University System revenue financing bonds, rated Aaa by Moody’s Investors Service and AA-plus by Standard & Poor’s and Fitch Ratings.
Yields ranged from 0.82% with a 1.875% coupon in 2016 to 4.12% with a 5% coupon in 2028. The bonds are callable at par in 2023. Bonds with 5% coupons yielded nine basis points to 32 basis points above Tuesday’s Municipal Market Data scale.
Tuesday, Wells priced $240 million of taxable bonds for the university. The bonds were priced at par to yield 0.38% in 2014 to 4.972% in 2043. Spreads ranged from 10 basis points to 115 basis points above the comparable Treasury yield.
JPMorgan priced $122.5 million of Jacksonville, Fla., taxable and tax exempt bonds, rated Aa2 by Moody’s, AA-minus by Standard & Poor’s and AA by Fitch.
The first pricing of $86.3 million consisted of tax-exempt bonds. Yields on the first series, $54.6 million of special revenue and refunding bonds, ranged from 0.63% with a 3% coupon in 2015 to 5.21% with a 5% coupon in 2040. The bonds are callable at par in 2023. Yields on the second series of $31.7 million of special revenue refunding bonds, ranged from 4.33% with a 5.25% coupon in 2027 to 4.73% with a 5.25% coupon in 2030. The bonds are callable at par in 2023.
The second pricing consisted of $36.2 million of taxable bonds. Spreads ranged from 50 basis points to 165 basis points above the comparable Treasury yield.
Bank of America Merrill Lynch won the bid for $215.5 million of Portland, Ore., second lien sewer system revenue and refunding bonds, rated Aa3 by Moody’s and AA-minus by Standard & Poor’s.
Yields ranged from 0.18% with a 3% coupon in 2014 to 4.82% with a 5% coupon in 2038. The bonds are callable at par in 2023.
Tuesday, yields on the triple-A Municipal Market Data scale ended as much as eight basis points weaker. The 10-year yield increased eight basis points to 3.02% and the 30-year yield rose four basis points to 4.49%. The two-year finished flat at 0.43% for the 34th straight session.
Yields on the Municipal Market Advisors scale ended as much as six basis points higher. The 10-year and 30-year yields rose five basis points each to 3.14% and 4.59%, respectively. The two-year closed unchanged at 0.55% for the 13th session.
Treasury prices headed lower on the shorter maturing bonds Wednesday afternoon. The two-year and 10-year yields rose three basis points each to 0.45% and 2.89%, respectively. The 30-year was steady at 3.79%.
