The tax-exempt market finished Wednesday mostly steady as a flood of primary deals hit the market.
Traders said the secondary market was quiet as focus went to new deals.
“It’s hard to get a real grasp of the secondary because all the focus is on the primary, unfortunately,” a New York trader said. “Some of the deals that I was following seem like they are being priced to go and being bumped up so it seems like there is plenty of demand.”
He added because of the attention on the primary, the secondary was quiet. “It almost seems like another Monday. Tuesday was extremely quiet in the afternoon and today the focus is on the new issues. There was a fair amount of bid-wanteds this morning but that has died down.”
Another trader noted the market felt stale, and while there was weakening for several trading sessions, it wasn’t enough to entice interest.
“I’m just seeing the same bonds offered every single day,” he said. “There is a lot of stuff that’s more interesting than munis right now.”
In the primary, Bank of America Merrill Lynch priced for retail $810.8 million of Dormitory Authority of the State of New York personal income tax revenue bonds, rated AAA by Standard & Poor’s and AA by Fitch Ratings. Institutional pricing is expected Thursday.
Yields on the first series, $755.5 million of tax-exempt bonds, ranged from 0.31% with 2% and 5% coupons in a split 2014 maturity to 3.5% priced at par in 2037. Portions of credits maturing between 2021 and 2028, between 2030 and 2034, and in 2042 were not offered for retail. The bonds are callable at par in 2022. Credits maturing in 2022 are not callable.
Yields on the second series, $55.3 million of tax-exempt bonds, ranged from 0.36% with a 2.5% coupon in 2014 to 3.30% with a 5% coupon in 2037. The bonds are callable at par in 2022.
Jefferies & Co. priced for retail $727 million of Massachusetts School Building Authority senior dedicated sales tax refunding bonds, rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s and Fitch. Institutional pricing is expected Thursday.
Yields ranged from 0.75% with 3% and 4% coupons in a split 2017 maturity to 3% priced at par in 2030. Portions of credits maturing between 2028 and 2030 were not offered for retail. The bonds are callable at par in 2022.
Barclays priced $865.4 million of City and County of Denver, Colo., Department of Aviation airport system revenue bonds, rated A1 by Moody’s and A-plus by Standard & Poor’s and Fitch.
Yields on the first series, $329.7 million of bonds subject to the alternative minimum tax, ranged from 0.80% with a 4% coupon in 2014 to 4.10% with a 4% coupon in 2043. Bonds maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022.
Yields on the second series, $505.4 million, ranged from 0.52% with a 3% coupon in 2014 to 3.89% with a 4% coupon and 3.57% with a 5% coupon in 2043. Credits maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2022 except for those maturing in 2023 and 2024.
The third series, $30.4 million of taxable bonds, were priced at par to yield 3.592% in 2026. The bonds were priced 190 basis points above the comparable Treasury yield.
On Wednesday, the 10-year Municipal Market Data yield and the 30-year yield finished flat at 1.70% and 2.87%, respectively. The two-year closed flat for the 11th session at 0.30%.
Elsewhere in the new-issue market, JPMorgan priced $350 million of Los Angeles Department of Water and Power power system revenue bonds, rated Aa3 by Moody’s and AA-minus by Standard & Poor’s and Fitch.
The bonds yielded 3.20% with a 5% coupon in 2038 and 3.28% with a 5% coupon in 2043. The bonds are callable at par in 2022.
In the competitive market, Bank of America Merrill Lynch won the bid for $424.9 million of South Carolina Transportation Infrastructure Bank revenue refunding bonds, rated A1 by Moody’s and A by Fitch.
Yields ranged from 0.40% with a 5% coupon in 2013 to 3.625% at par in 2033. The bonds are callable at par in 2022.
In the secondary market, trades compiled by data provider Markit showed a mix of strengthening and weakening.
Yields on New Jersey’s Tobacco Settlement Financing Corp. 4.5s of 2023 and Pennsylvania 5s of 2020 fell one basis point each to 4.87% and 1.43%, respectively.
Other trades showed weakening. Yields on New Jersey Transportation Trust Fund Authority 5.5s of 2041 and Dallas Fort-Worth International Airport 5s of 2042 rose one basis point each to 3.27% and 4.01%, respectively. Yields on Chicago zero-coupon bonds maturing in 2033 increased one basis point to 4.73%.