The tax-exempt market traded steady to a few basis points weaker Tuesday afternoon as the secondary faded and market participants prepared for pricings of new deals.
"Most people are focused on new issues," said Dan Toboja, vice president of Ziegler Capital Markets. "The new issues are going to be lighter than a full week just because people don't want to bring deals in a holiday-shortened week so it's adding up to not much going on today. When deals start pricing tomorrow the market should pick up when people look at their cash positions."
In the primary market, several of the week's new issues priced for retail investors amid an overall drop in supply. The market can expected $5.04 billion in new deals, down from last week's revised $6.34 billion. The negotiated market can see $3.54 billion, down from last week's revised $5.13 billion. On the competitive calendar, $1.50 billion should be auctioned, up from last week's revised $1.21 billion.
M.R. Beal priced for retail $375 million of New York City Municipal Water Finance Authority water and sewer system second general resolution bonds, rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch.
The bonds yielded 4.78% with a 4.625% coupon and 4.67% with a 5% coupon in a split 2046 maturity. A portion of the bonds maturing in 2046 were not offered for retail. The bonds are callable at par in 2023.
Bank of America Merrill Lynch priced for retail $277.7 million of Virginia Transportation Board federal transportation grant anticipation revenue notes, rated Aa1 by Moody's and AA by Standard & Poor's.
Yields ranged from 0.26% with a 5% coupon and 0.41% with a 5% coupon in a split 2015 maturity to 4% priced at par in 2028. Bonds maturing in 2014 were offered via sealed bid and portions of bonds maturing between 2025 and 2028 were not offered for retail. The bonds are callable at par in 2023.
Two issuers in Missouri are also expected to price $262.1 million total. The Curators of the University of Missouri released indications of interest on $161.3 million of taxable bonds and Missouri Environmental Improvement and Energy Resources Authority priced for retail $100.8 million of revenue bonds.
On Friday, the triple-A Municipal Market Data scale ended as much as nine basis points weaker. The 10-year yield rose nine basis points to 2.58% and the 30-year yield rose seven basis points to 4.15%. The two-year was steady for the ninth session at 0.34%.
Yields on the Municipal Market Advisors benchmark scale rose as much as eight basis points. The 10-year yield increased seven basis points to 2.72% and the 30-year yield rose six basis points to 4.36%. The two-year yield increased one basis point to 0.49%.
Treasuries continued to weaken Tuesday afternoon. The benchmark 10-year yield rose three basis points to 2.78%. The two-year and 30-year yields increased two basis points each to 0.34% and 3.86%, respectively.
