Municipal bonds continued to sell-off on Wednesday morning, following Treasuries' yield hike.
The muni yield increases were experienced most notably in the intermediate part of the curve with bonds maturing in eight to 11 years' yields growing three to five basis points, according to Municipal Market Data's triple-A scale.
Bonds maturing in 12 to 14 years' yields rose two to four basis points, and the seven-year maturity's yield also increased two to four basis points.
The front and back ends of the curve experienced a less dramatic change, with bonds maturing in six years' yield rising one to three basis points, and bonds maturing from 15 to 30 years' yields rising by the same amount.
One- to four-year maturities were "under review" according to MMD.
The two-year Treasury note increased by one basis point to 0.57%, the 10-year by three basis points to 2.53%, and the 30-year by four basis points to 3.27% from Tuesday.
The bulk of large primary issuances scheduled for the week are expected to price Wednesday, with the market paying the most attention to the $372.74 million Chicago second lien water revenue bonds. Trader have debated about the deal's potential pricing throughout the week, questioning whether the bonds' association to the fiscally troubled city would drive up their yields or if their decent ratings and the low $3.1 billion scheduled supply will cause the bonds to come more aggressively than expected.
The bonds earned ratings of A3 from Moody's Investors Service, AA-minus from Standard & Poor's and AA from Fitch Ratings.
Elsewhere in the negotiated market, Wells Fargo Securities is expected to price $286.4 million Pennsylvania Turnpike special obligation taxable bonds. The bonds, planned with serial maturities from 2014 to 2027, received a triple-A rating from Moody's.
Citigroup Global Markets is expected to price Minneapolis St. Paul Airport's $274 million bonds. The bonds are rated A by both S&P and Fitch.
Bank of America Merrill Lynch is scheduled to price $121.47 million Maryland Community Development Administration residential revenue bonds. The bonds are rated Aa2 by Moody's and AA by S&P.
The $200 million New York City Municipal Water Finance Authority's water and sewer system second general resolution revenue bonds top the competitive calendar for Wednesday. The bonds are rated Aa2 by Moody's and AA-plus by S&P and Fitch.
