Market Post: Market on Hold for Week's Volume

There was a light tone to the municipal market on Monday as traders held their bullets for the week's larger issuances set to tap the market on Tuesday and Wednesday.

By midday on Monday, no deals over $100 million had priced as the New York City general obligation deal collected interest in its second day of retail orders, said traders. The mammoth $2 billion New York City sales tax asset corporation will begin taking institutional orders on Tuesday, according to data provided by TM3.

There is potential for Tuesday's order period to become oversubscribed, said a New York based trader. The strong, pent up demand for the new paper has potential to create intense demand for the deal, the trader said.

Priced by senior manager JPMorgan Securities, the sales tax asset revenue bonds are structured as serials that mature from 2015 to 2033 and are rated Aa1 by Moody's Investors Service, AAA by Standard & Poor's, and AA-plus by Fitch Ratings.

The light primary created sluggish scales Monday morning, traders said. Bonds maturing between 2015 and 2022 were steady as bond maturing between 2023 through 2044 strengthened up to two basis points, according to data provided by TM3. Activity in the scale will likely happen later in the week after the market has time to process and digest the primary's results, said traders.

In the secondary, the Metropolitan Transportation Authority of New York was one of the top traded issues, with $11.265 million traded by midday Monday, according to data provided by Municipal Securities Rulemaking Board's disclosure website EMMA. Yields on the 5s of 2026 tightened to 2.67% in round lot trading on Monday morning, a five basis point contraction from trading last Thursday, according to EMMA.

The Treasury market strengthened on Monday morning, most notably in the front end where yields on the two-year note fell four basis points to 0.55% from Friday's close. The 10-year dropped three basis points to 2.56% and the 30-year tightened two basis points to 3.27%.

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