The municipal bond market turned its attention to the week's largest deals pricing in the primary market, as issuers looked to take advantage of a six-day rally in bond prices.
Prices climbed higher for a sixth session Tuesday morning, even with lighter trading volume. "Secondary activity has slowed today," a Chicago trader said. "It feels a bit stronger. It's flat on the shorter end but stronger out long."
Puerto Rico debt was also firmer. After a selloff throughout most of the third quarter of this year and into the fourth, prices have been steadily climbing higher since the commonwealth held an investor call Oct. 15 to reassure investors of its financial stability. "There is a lot more strength in Puerto Rico these days. It's coming back a little bit," the trader said.
In the primary market, Siebert Brandford Shank & Co. will price for retail $600 million of Connecticut special tax obligation debt for transportation infrastructure financing. The bonds are rated Aa3 by Moody's Investors Service and AA by both Standard & Poor's and Fitch Ratings. Institutional pricing is expected Wednesday.
Goldman, Sachs & Co. will price for retail $630 million of New York's Metropolitan Transportation Authority in two pricings, rated A2 by Moody's and A by Standard & Poor's. The pricings will consist of $500 million and $130 million. Institutional pricing is expected Wednesday.
Goldman will also price $571.7 million of triple-A special revenue bonds from the Nevada Unemployment Compensation Fund.
Morgan Stanley is expected to price for institutions $300 million of Colorado Health Facilities Authority revenue bonds on behalf of SCL Health System. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
In retail pricing Monday, yields ranged from 4.17% with a 4.125% coupon in 2027 to 5.08% with a 5% coupon in 2044. Bonds maturing in 2026 were priced at par to yield 4% in 2026. The bonds are callable at par in 2024.
Fifth Third Securities is expected to price $80 million of pension obligation bonds for Bloomfield Township, Mich., in the first public offering of pension debt under a new Michigan law allowing municipalities to borrow to cover the cost of their unfunded retirement liability.
Fifth Third issued indications of interest Monday afternoon on the triple-A rated general obligation limited tax pension obligation bonds. Spreads ranged from 25 basis points to 225 basis points above the comparable Treasury yield with maturities ranging from 2014 to 2032. The bonds are callable at par in 2023.
On Monday, yields on the triple-A Municipal Market Data scale ended as much as three basis points stronger. The 10-year and 30-year yields fell one basis point each to 2.48% and 4.06%, respectively. The two-year was steady at 0.35% for the 12th session.
Yields on the Municipal Market Advisors benchmark scale ended as much as two basis points firmer. The 10-year slid one basis point to 2.63%. The two-year and 30-year yields were steady at 0.53% and 4.23%, respectively, for the second session.
Treasuries were mostly weaker. The two-year and 30-year yield rose one basis point each to 0.32% and 3.62%, respectively. The benchmark 10-year was steady at 2.52%.
