Municipal bond market transactions dwindled Friday as traders prepared for a three-day holiday weekend, though that didn’t stop yields from rising on Puerto Rico bonds.
Yields on Puerto Rico Sales Tax Financing Corp. 5.25s of 2041 jumped 21 basis points to 8.61% and COFINA 6s of 2042 rose five basis points to 8.83%, according to data provided by Markit.
Yields on the commonwealth’s public improvement 5.5s of 2039 increased five basis points to 9.31%.
The weighted average price of bonds in the Standard & Poor’s Municipal Bond Puerto Rico index ended at 48.53, down 6.6% for the month to date and nearly 25% for the year, said J.R. Rieger, vice president of fixed income at Standard & Poor’s Dow Jones indices. The index has posted negative returns of 5.61% this month and 21.11% this year.
Other high-yield bonds have also returned negative performance. The S&P Municipal Bond Tobacco Index returned negative 1.63% for the month and negative 9.52% for the year.
The S&P Municipal Bond High Yield Index fell 0.62% for October and 4.97% for the year. Investment grade bonds as tracked by the S&P National AMT-Free Municipal Bond Index returned a negative 0.4% for the month and negative 3.89% for the year.
The general market was quiet Friday as traders took a breather from the negative headlines surrounding Puerto Rico, the government shutdown, and the debt ceiling.
“There are no strong bids and it’s slow ahead of the three-day weekend,” a Maryland trader said. “It could also be due to the federal government which can’t get its act together,” he said.
“It’s terribly quiet,” a New York trader said. “It’s a Friday before the holiday. Everyone is just going through the motions right now.” The bonds markets are closed Monday for the Columbus Day holiday.
In other secondary trades, yields on University of Washington 5s of 2023 rose two basis points to 2.83% and California’s Golden State Tobacco Securitization Corp. 5s of 2045 increased one basis points to 5.14%.
Other trades were stronger. Yields on Pennsylvania Commonwealth Financing Authority 5s of 2042 and Dormitory Authority of the State of New York 5s of 2023 fell two basis points each to 5.05% and 3.01%, respectively.
On Friday, yields on the triple-A Municipal Market Data scale ended unchanged. The 10-year and 30-year yields were flat for the second session at 2.60% and 4.18%, respectively. The two-year was steady at 0.35%.
Yields on the Municipal Market Advisors benchmark scale also ended mostly flat across the curve. The 10-year yield rose one basis point to 2.75%. The 30-year yield was steady at 4.33% for the second session and the two-year was unchanged at 0.55% for the fourth session.
Treasuries were slightly stronger on longer maturing bonds. The benchmark 10-year and 30-year yields fell one basis point each to 2.68% and 3.74%, respectively. The two-year was flat at 0.35%.
Looking to next week’s issuance, $4.19 billion is expected, up from this week’s revised $3.51 billion. In negotiated deals, $3.54 billion should be priced, up from the past week’s revised $2.79 billion. On the competitive calendar, $655.8 million should be auctioned, down from the past week’s revised $721.2 million.
