The municipal bond market saw more supply hit the screens on Wednesday as New York, Texas and Oregon issues were priced.
The recent rally in municipal bonds stalled out only a day after yields plunged, leaving munis at unchanged levels on Wednesday, traders said.
PRIMARY MARKET
Barclays Capital priced the Dormitory Authority of the State of New York's $1 billion general purpose state personal income tax revenue bonds for institutional investors after a one-day retail order period on Tuesday.
The DASNY issue was priced as 5s to yield 1.42% in 2015, and from 1.61% with 3% and 5% coupons in a split 2021 maturity to being priced at par to yield 3.20% in 2036.
The bonds are rated triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
The Board of Regents of the Texas A&M University System came to market with $383.76 million in two tax-exempt and taxable issues.
Citigroup Global Markets priced the $206.825 million revenue financing system bonds, Series 2015 A&B.
The $64.67 million Series A bonds were priced with a top yield of 1.99% with a 5% coupon in 2025. The $142.155 million Series B bonds were priced with a top yield of 3.28% with a 4% coupon in 2044.
J.P. Morgan Securities priced Texas A&M's $176.93 million taxable revenue financing system bonds. The bonds were priced at par with a top yield of 3.451% in 2034.
Both issues are rated triple-A by Moody's Investors Service and AA-plus by S&P and Fitch.
Citi priced the Oregon Department of Administrative Services' $399.5 million lottery revenue bonds in five series of tax exempts and tax-exempt refundings.
The Series A bonds had a top yield of 2.64% with a 5% coupon in 2035; the Series C bonds had a top yield of 2.27% with a 5% coupon in 2028; the Series D, E and F bonds all had top yields of 2.33% with 5% coupons in 2029.
The issue is rated Aa2 by Moody's and triple-A by S&P.
Citi also priced the Broward County, Fla., School Board's $253.56 million certificates of participation. The COPs were priced with a top yield of 2.96% with a 5% coupon in 2030. The issue is rated A1 by Moody's, A by S&P and A-plus by Fitch except for the 2027 and 2028 maturities, which are insured by AGM and rated A2 by Moody's and AA by S&P.
SECONDARY MARKET
Prices of top-quality municipal bonds were unchanged after rallying strongly on Tuesday.
The yield on the benchmark 10-year general obligation remained at 1.89% on Wednesday from Tuesday's close after falling from 1.96% on Monday, while the yield on 30-year GOs was flat at 2.67% after falling 10 basis points on Tuesday from 2.77% on Monday, according to the final read of Municipal Market Data's triple-A scale.
"Performance in short munis has been hurt by determination of the Federal Reserve to start normalizing rates by mid-2015. But, one must wonder if inflation pressure will materialize as oil kept trending lower and the U.S. dollar made gains versus major trading partners," says Randy Smolik, Senior Analyst at MMD.
"Thus, a flattening curve bias has predominated, allowing impressive gains in the 10-year and 30-year sectors of the market," Smolik said.
The 10-year muni to Treasury ratio was at 96.4% compared to 96.4% on Tuesday, while the 30-year muni to Treasury ratio was at 106.0% versus 106.0%.
Treasury prices were little changed on Wednesday, with the two-year note yield flat at 0.62% from Tuesday.
The 10-year yield was unchanged at 1.96%, while the 30-year yield fell to 2.52% from 2.54%.
