Trading volume of Puerto Rico Sales Tax Financing Corp. rose Monday morning following last week's investor call by the commonwealth discussing COFINA's legal opinions.
In morning trading, COFINA volume was 22% higher than the average of the last five Monday sessions and mostly dealer to customer sells. "The most active COFINA CUSIP is trading cheaper relative to trades on Friday," a Chicago trader said. "COFINA is being sold off of dealer books and not to other dealers."
In the primary market, Hawaii is expected to hold a second retail order period for $807 million of general obligation bonds, priced by Bank of America Merrill Lynch. The bonds are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings. Institutional pricing is expected Tuesday.
In the first retail order period Friday, yields on the first series of $635 million ranged from 1.16% with a 5% coupon in 2018 to 4.14% with a 4% coupon in 2033.Portions of bonds maturing between 2025 and 2033 were not offered for retail. The bonds are callable at par in 2023.
The second series of $35.6 million was offered via sealed bid.
The third series of $58.6 million yielded 0.37% with 3% and 5% coupons in a split 2015 maturity.
The fourth series of $27 million yielded 0.57% with 3% and 5% coupons in a split 2016 maturity.
Yields on the fifth series of $50.6 million ranged from 0.84% with a 3% coupon in 2017 to 2.66% with a 3% coupon in 2023.
On Friday, the triple-A Municipal Market Data scale ended as much as two basis points weaker. The 10-year and 30-year yields rose two basis points to 2.46% and 4.06%, respectively. The two-year was steady for the fourth session at 0.34%.
Yields on the Municipal Market Advisors benchmark scale ended as much as three basis points weaker. The 10-year yield rose three basis points to 2.62% and the 30-year yield increased two basis points to 4.25%. The two-year was flat for the third session at 0.48%.
Treasuries were stronger Monday morning after weakening Friday. The benchmark 10-year yield slid three basis points to 2.60% and the 30-year yield fell two basis points to 3.68%. The two-year yield fell one basis point to 0.31%.