After being free to trade on Thursday morning, both the senior and junior lien San Joaquin Hills bonds jumped to the top of trading lists, affirming the overall weakness on the long end while regaining a little strength in secondary trading.
Longer dated maturities on the senior lien bonds were raised by the deal team during the pricing process, and traders maintained the elevated yields during secondary trading on Thursday after the bonds were ticketed. Yields on senior lien bonds maturing between 2029 through 2050 were raised between eight and 20 basis points from premarketing to preliminary pricing, according to documents given to The Bond Buyer.
On Thursday morning, traders largely agreed about the deal's overall softness, but noted it captured some strength. Yields on the junior lien 5.25s of 2049 fell one basis point to 4.79% from its initial offering yield of 4.80%, as yields on the senior lien 5s of 2050 fell four basis points to 4.41% from the original 4.45%, according to the Municipal Securities Rulemaking Board's disclosure website, EMMA.
Most dramatically, yields on the junior lien's 5.25s of 2044 fell nine basis points to 4.46% from the initial offering yield of 4.55%, according to EMMA.
The senior lien bonds are rated BBB-minus by Standard & Poor's and Fitch Ratings, and are current interest bonds, convertible capital appreciation bonds, and capital appreciation bonds. The junior liens are rated BB-plus by S&P and Fitch and are current interest bonds.
San Joaquin regained strength against a softening municipal market. Yields on bonds maturing between 2025 and 2044 rose between one and four basis points, as bonds maturing between 2016 and 2024 weakened up to two basis points, according to the Municipal Market Data's triple-A 5% scale. Yields on bonds maturing in 2015 held steady.
Pricing on the Metropolitan Transportation Authority deal was not yet available.
Treasury yields were sluggish on Thursday morning, marginally changed from Wednesday's market close. Yields on the two-year fell one basis point to 0.40% from 0.41%, while the 10- and 30-year each edged up three basis points to 2.28% and 3.05%, respectively.
