NEW YORK – The tax-exempt market saw more activity than expected Tuesday morning, but choppy Treasuries slowed down muni trading by early afternoon.
“It’s busier than I thought it would be,” said a trader in New York. “Treasuries are starting to look real choppy. That may slow us down a bit.”
The Municipal Market Data scale was not updated by press time. But on Tuesday morning, munis continued to firm, gaining after Monday’s rally.
On Monday, the two-year muni closed flat at 0.42% for its 14th consecutive trading session. The 10-year yield finished down three basis points to 2.23% and the 30-year yield closed down two basis points to 3.75%.
In early afternoon trading, Treasuries were mixed and choppy. The benchmark 10-year erased gains from Monday as its yield rose back up to 1.98%, The 30-year yield was trading around 2.95%, up one basis point from this morning, but down one basis point from Monday’s close. The two-year was down one basis point from Monday, at 0.27%, but steady from the morning.
In the primary market, Loop Capital Markets priced for institutions $211.3 million of University of Connecticut general obligation bonds following two days of retail pricing. The credit is rated Aa2 by Moody’s Investors Service, AA by Standard & Poor’s and AA-minus by Fitch Ratings.
Yields on the first series, $179.6 million of GOs, ranged from 0.40% with 2%, 3%, and 5% coupons in a 2013 split maturity to 3.81% with a 5% coupon in 2031. Debt maturing in 2012 was offered via sealed bid. The bonds are callable at par in 2021. Bonds were cheapened up to three basis points from Monday’s retail pricing.
Yields on the second series, $31.7 million of refunding GOs, ranged from 0.20% with a 1.5% coupon in 2012 to 2.82% with a 5% coupon in 2023. The bonds are callable at par in 2021. The bonds were cheapened up to two basis points from Monday’s retail pricing.
Wells Fargo priced for institutions $170.9 million of Westchester County Health Care Corp. revenue bonds in two pricings, consisting of $107.7 million of Series 2000 A senior lien bonds and $63.2 million of Series 2011 senior lien bonds. The credit is rated A3 by Moody’s and BBB by Standard & Poor’s.
Yields on the first series, $107.7 million of senior lien bonds, ranged from 3.98% with a 5% coupon in 2021 to 5.09% with a 5% coupon in 2030. The debt is callable at par in 2021. Yields were cut between two and three basis points from Monday’s retail pricing.
Within the $63.2 million series, $48 million of Series 2011 A and $15.2 million of Series 2011 B bonds were offered.
Yields on the series A ranged from 1.35% with a 2% coupon in 2012 to 5.43% with a 5.25% coupon in 2041.
Bonds on the series B yielded 5.43% with a 5.25% coupon in 2041.
RBC Capital Markets priced $163.5 million of School District of Philadelphia GOs. The bonds are rated Aa2 by Moody’s, A-plus by Standard & Poor’s, and AA by Fitch. The deal was split into two series, consisting of $146.3 million of federally taxable qualified school construction bonds and $17.2 million of tax-exempt bonds. Details were not available at press time.
