Market Post: No Drive Keeps Munis Quiet, Steady

The tax-exempt market continued to trade with very low volume Tuesday as traders said it was quieter than most Mondays.

"It's quiet," a Los Angeles trader said. "It could be a little hangover from the weekend. There is very little on the bid-wanted side and no new issues today. Treasuries aren't doing anything so there is no direction. We are all waiting for something to happen."

Still, the market is holding steady, the trader said. "The market is holding in there. It's done OK. It just doesn't seem like it has any kind of drive to it. It's just a sleepy Tuesday and quieter than most Mondays."

He added the market is looking forward to the market picking up activity Wednesday when the majority of the primary issuance prices.

In the primary Tuesday, Bank of America Merrill Lynch should price for retail $149.5 million of Georgia Housing and Finance Authority single family mortgage bonds, rated AAA by Standard & Poor's. Institutional pricing is expected Wednesday.

B of A Merrill is expected to price $115 million of triple-A rated Delaware general obligation refunding bonds. Institutional pricing is expected Wednesday.

In the competitive market, Harford County, Md., auctioned $113.7 million of GOs in two pricings: $76.9 million and $40 million. The bonds are rated Aaa by Moody's Investors Service, AA-plus by Standard & Poor's and AAA by Fitch Ratings.

Citi won the bid for $74.7 million. Yields ranged from 0.20% with a 2% coupon in 2014 to 2.98% with a 3% coupon in 2028. The bonds are callable at par in 2023.

JPMorgan won the bid for $40 million. Prices were not available by press time.

On Friday, municipal bond market scales finished steady to a basis point weaker.

The Municipal Market Data triple-A GO scale ended flat to one basis point lower. The 10-year yield rose one basis point to 1.85%. The 30-year was steady at 2.92% for the third session while the two-year was steady at 0.32% for the fifth session.

The Municipal Market Advisors 5% coupon triple-A benchmark scale ended steady Friday. The 10-year yield finished steady at 1.87% for the third session while the 30-year yield also closed flat for the third session at 2.99%. The two-year closed unchanged at 0.35% for the 15th session.

Treasuries were steady to slightly firmer Tuesday afternoon. The two-year yield and benchmark 10-year yield fell one basis point each to 0.27% and 2.00%, respectively. The 30-year was steady at 3.18%.

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