East coast issuers were stealing all the attention Wednesday as New Jersey Turnpike Authority, New York City Transitional Finance Authority, and Massachusetts were all expected to hit the market with a large amount of bonds.
But until those deals price later Wednesday, the market was quiet and cooling off from what traders described as an overheated Monday and Tuesday.
"It's quiet," a Chicago trader said. "Some of these issues seem rich to me. I wonder if they'll get done."
He added the market got ahead of itself Monday and Tuesday. "The market was looking for any good news to stop the bleeding and Cyprus got everyone excited," he said, adding balances left over from Tuesday's New Mexico deal could give an indication of demand in the market so far this week.
JPMorgan is expected to price for institutions $1.4 billion of New Jersey Turnpike Authority turnpike revenue bonds, rated A3 by Moody's Investors Service, A-plus by Standard & Poor's and A by Fitch Ratings.
In retail pricing Tuesday, yields ranged from 0.74% with a 3% coupon in 2016 to 4% priced at par and 4.14% with a 4% coupon in a split 2043 maturity. Bonds maturing between 2027 and 2032 were not offered for retail. The bonds are callable at par in 2022 except for bonds maturing in 2023.
Wells Fargo Securities is expected to price for institutions $900 million of New York City Transitional Finance Authority tax-exempt, future tax-secured subordinate revenue bonds, rated Aa1 by Moody's and AAA by Standard & Poor's and Fitch.
In the second retail order period Tuesday, yields on the first series, $650 million of tax-exempt subordinate bonds, ranged from 0.54% with a 4% coupon in 2016 to 3.83% with a 4% coupon in 2039. Bonds maturing in 2015 were offered via sealed bid. Credits maturing between 2025 and 2030 were not offered for retail. The bonds are callable at par in 2023. Yields were lowered as much as three basis points from the first retail pricing Monday.
Yields on the second series, $72 million of future tax secured tax-exempt subordinate bonds, ranged from 0.44% with a 4% coupon in 2015 to 2.91% with a 5% coupon in 2028. Credits maturing in 2013 and 2014 were offered via sealed bid. The bonds are callable at par in 2023. Yields were cut as much as four basis points from the first retail pricing Monday.
Yields on the third series, $178 million of future tax secured tax-exempt subordinate bonds, ranged from 0.44% with a 4% coupon in 2015 to 3.42% with a 3.25% coupon in 2031. Credits maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023. Yields were cut as much as four basis points from the first retail pricing.
In the competitive market, New York City Transitional Finance Authority will auction $121 million of bonds in two pricings — $100 million and $21 million.
Massachusetts should auction $525 million of GOs in two pricings — $450 million and $75 million — rated Aa1 by Moody's and AA-plus by Standard & Poor's and Fitch.
On Tuesday, yields on municipal bond market scales ended lower for the second session.
Yields on the MMD triple-A GO scale ended as much as three basis points lower. The 10-year yield fell three basis points to 1.94% while the 30-year yield dropped two basis points to 3.09%. The two-year finished flat at 0.31% for the 21st consecutive session.
Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended as much as two basis points lower. The 10-year yield fell one basis point to 2.00% while the 30-year yield dropped two basis points to 3.18%. The two-year held at 0.33% for the 16th session.
Treasuries were weaker after posting gains Monday and Tuesday. The benchmark 10-year yield jumped four basis points to 1.95% while the 30-year yield rose three basis points to 3.17%. The two-year yield increased one basis point to 0.26%.
