Puerto Rico bonds issued Tuesday continued to firm in secondary trading Wednesday, with average yield falling as low as 8.28% before settling around 8.32% by midday. The week's other largest deals came to the market Wednesday afternoon, offering traditional municipal bond buyers some options.
Yield on the Puerto Rico bonds, with an 8% coupon maturing in 2035, fell by 14 basis points Tuesday to 8.59%, according to the MSRB. The yield has sunk another 27 basis points to 8.32% Wednesday morning, Bloomberg data show.
The price gains weren't limited to just the commonwealth's new bonds. Puerto Rico GO yields on a 5% coupon maturing in 2041 fell seven basis points to 7.38%, while Sales Tax Financing Corp. (COFINA) yields also slid seven basis points to 6.73% on a 5.5% coupon in 2023.
The New York State Dormitory Authority issued $788 million of tax-exempt bonds Wednesday, presenting a highly rated alternative for investors looking for more traditional municipal securities. The bonds are rated triple-A by Standard & Poor's and AA by Fitch Ratings.
Yield on the DASNY bonds ranged from 0.55% with a 3% coupon in 2017 to 4.07% with a 4% coupon in 2033. Bonds with a 5% coupon yield from 0.55% in 2017 to 3.63% in 2030. The yields on the short end of the offering are as much as 51 basis points lower than a July sale by the issuer.
The competitive market featured three deals over $100 million, including $278 million of bond anticipation notes issued by Hartford, Conn.'s Metro District. The offering came as a four-part deal.
Morgan Stanley & Co. won both the $100 million and $90.5 million bid, while JP Morgan Securities was awarded the $35 million and the $52.8 million bid.
Bank of America Merrill Lynch won the bid for $153 million of Boston, Mass., general obligation bonds. Yields ranged from 0.12% with a 5% coupon in 2015 to 3.68% with a 4% coupon in 2034. The triple-A rated bonds are callable at par in 2024.
Citigroup Global Markets won the bid for $117 million of general obligation bonds issued by Sequoia Union High School District, Calif. Yields ranged from 0.10% with a 2% coupon maturing in 2014 to 3.93% with a 4% coupon in 2035. The AA rated bonds are callable at par in 2024.
Municipal bond yields measured by Municipal Market Data's AAA scale firmed on both intermediate and long-term bonds, falling as much as four to six basis points, respectfully.
Treasury yields firmed Wednesday, as the 30-year and the 10-year benchmark were both down five basis points to 3.68% and 2.73%, respectfully. Two-year notes were one basis point lower at 0.37%.
