Trading activity was heavy with a bulk of the week's new issue calendar entering the market on Tuesday as municipal bonds weakened.
"Monday was such a slow day and retail has come back into the market today," a trader based in New York said. "New issues are helping to move the market today."
Muni yields rose across the curve on Tuesday, according to Municipal Market Data's triple-A scale. Yields for bonds maturing in three to four years increased by one to three basis points. Yields grew by two to four basis points for bonds maturing in six to 30 years.
According to the Municipal Market Advisor's 5% triple-A scale, the 30-year yield grew by two basis points to 3.55%, while the 10-year rose by three basis points to 2.31%. The two-year yield held steady at 0.33%.
Morgan Stanley brought $850.1 million of New York City general obligation bonds to the market Tuesday for a second day of its retail order period. Yields were raised 2 basis points on repricing.
"We try to track the market movement on the MMD on second day so that we are not falling behind or getting ahead of investors," Alan Anders, Deputy Director for Finance at the Mayor's Office of Management and Budget, said in an interview.
Yields on $745 million ranged from 0.80% with a 4% coupon in 2017 to 3.85% with a 3.75% coupon in 2034. There are sealed bids on bonds maturing serially from 2014 to 2016. Bonds maturing serially from 2028 to 2032 were not available for purchase during the retail order period. The bonds are callable at par in 2024.
Yields on a $105.1 million series ranged from 0.80% with a 3% coupon in 2017 to 2.46% with a 4% coupon in 2022. There are sealed bids on bonds maturing serially from 2014 and 2016. There is no call option.
The deal will price for institutional sale on Wednesday and earned an Aa2 rating from Moody's, and AA from both Standard & Poor's and Fitch Ratings.
Morgan Stanley priced a three-part deal totaling $248.5 million of Louisville Regional Airport Authority revenue bonds. The deal is rated A-plus by both S&P and Fitch.
Yields on $118.8 million of alternative minimum tax bonds ranged from 0.24% with a 2% coupon in 2015 to 3.84% with a 5% coupon in 2032. The bonds are callable at par in 2024.
Yields on $126.4 million of taxable bonds ranged from 0.25% coupon maturing in 2015 at par to 4.451% coupon in 2031 at par. All of the bonds are priced at par and are callable in 2024. There is a term bond in 2031 and 2038.
Yields on $3.3 million of tax-exempt bonds ranged from 0.24% with a 2% coupon in 2015 to 2.57% with a 5% coupon in 2023. There is no call option.
Morgan Stanley priced $237 million of Indiana Finance Authority first lien wastewater utility revenue bonds. Yields ranged from 0.23% with a 3% coupon in 2015 to 4.27% with a 4.25% coupon in 2044. The bonds are callable at par in 2024 with a term bond in 2039 and two term bonds in 2044.
The deal is rated Aa by Moody's Investors Service and A by Standard and Poor's.
Goldman Sachs priced $121.3 million of Kentucky Turnpike Authority economic development road revenue refunding bonds.
Yields ranged from 0.33% with a 1% coupon in 2016 to 2.78% with a5% coupon in 2025. There is no call option. The deal is rated Aa2 by Moody's, AA-plus by S&P and A-plus by Fitch.
Wells Fargo Securities priced a two-part deal totaling $219.9 million Nebraska Public Power District, N.D., GOs.
Yields for $195.4 million of revenue GOs ranged from 0.18% with a 2% coupon in 2015 to 4.16% with a 4% coupon in 2044. There are two term bonds in 2044 and all of the bonds are callable at par in 2022.
Yields for $24.5 million of revenue GOs are priced at par with a 0.48% coupon maturing in 2016 without a call option.
The deal is rated A1 by Moody's Investors Service and A by Standard & Poor's and A-plus by Fitch Ratings.
JP Morgan Securities won the bid for $115.2 million of Lynchburg, Va., GOs on Tuesday, the largest competitive deal of the week.
Yields ranged from 0.15% with a 2% coupon in 2015 to 4% with a 4% coupon in 2044. There are two term bonds in 2044. The bonds are callable at par in 2024.
The deal is rated Aa2 by Moody's and AA-plus by both S&P and Fitch.
Treasuries weakened Tuesday, with the 10-year benchmark and the 30-year yield jumping three basis points each, to 2.64% and 3.47%, respectively. The two-year note inched up one basis point to 0.44%.
Secondary market trading showed weakening, according to data provider Markit.
Massachusetts consolidated GOs with a 5% coupon maturing in 2041 rose three basis points to 3.31%, and Connecticut GOs jumped three basis points to 2.54%.
The New York Metropolitan Transportation Authority revenue bonds with a 5% coupon in 2023 climbed two basis point to 4.02% and the New Jersey Transportation Trust Fund Authority with a 5.25% coupon in 2023 inched up two basis point to 3.89%.
