NEW YORK – Traders were focused on the primary as two larger deals priced early Thursday, but as attention on those deals waned, dealers shifted their sights to the secondary market.

“People are still busy trading Puerto Rico bonds,” a New York trader said. “It was a large deal and a lot of flippers came back. They buy new deals and sell them to the street higher just for a quick profit. It happens when issuers price them too cheap, flippers put in for bonds and sell them as the deal frees up.”

Munis were steady to slightly weaker early Thursday afternoon, according to the Municipal Market Data scale. Yields inside four years were steady while the five-year to 19-years rose up to one basis point. Outside 20 years, yields were steady.

On Wednesday, the two-year yield was steady at 0.26%, its record low as recorded by MMD on Feb. 16. The 30-year yield was steady at 3.27%. The 10-year yield rose two basis points to 1.88%.

Since munis started weakening last Friday, the 10-year yield has risen six basis points while the 30-year yield has jumped five basis points.

Treasuries were steady across the curve. The two-year was flat at 0.31% while the 10-year was steady at 2.03%. The 30-year was unchanged at 3.17%.

In the negotiated market, Morgan Stanley priced for institutions $949 million of New York City general obligation bonds, following two retail order periods. The bonds are rated Aa2 by Moody’s Investors Service and AA by Standard & Poor’s and Fitch Ratings.

Yields on the first series, $167.2 million, ranged from 0.44% with a 5% coupon in 2014 to 2.61% with a 5% coupon in 2024. Bonds maturing in 2012 and 2013 were offered via sealed bid. The bonds are callable at par in 2022.

Yields on the second series, $781.8 million, ranged from 0.44% with 2% and 4% coupons in a split 2014 maturity to 3.27% with 3.125% and 5% coupons in a split 2032 maturity. Bonds maturing in 2013 were offered via sealed bid. The debt is callable at par in 2022.

“Buyers should be intrigued by the concessions offered on this loan,” said MMD’s Randy Smolik, referring to the NYC deal. “No doubt this loan will draw attention from the secondary.”

The deal “was stealing the show, priced at attractive spreads for institutions,” he added. “During the two-day retail order period about $200 million in orders surfaced. The deal has been increased and the preliminary offerings were cut three to seven basis points from yesterday's retail levels.”

JPMorgan priced $615 million of Port of Seattle intermediate lien revenue refunding bonds in three series, rated Aa3 by Moody’s and A-plus by Standard & Poor’s and Fitch.

Yields on the first series, $345.3 million of bonds not subject to the alternative minimum tax, ranged from 0.89% with 3% and 5% coupons in 2015 to 3.61% with a 5% coupon in 2033.

Yields on the second series, $189.3 million of bonds subject to the alternative minimum tax, ranged from 0.68% with a 4% coupon in 2013 to 3.36% with a 5% coupon in 2024. Bonds maturing in 2012 were not reoffered.

The third series, $80.4 million of taxable bonds, were priced late Wednesday. The bonds were priced at par with coupons ranging from 0.883% in 2013 to 2.062% in 2017. Bonds maturing in 2012 were offered via sealed bid with a 0.40% coupon. The bonds were priced 60 to 120 basis points above the comparable Treasuries.

Citi won the bid for $331 million of city and county of San Francisco general obligation bonds, rated Aa2 by Moody’s, AA by Standard & Poor’s, and AA-minus by Fitch. Pricing details were not available.

In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed firming over the past several days.

Bonds from an interdealer trade of Bryan, Texas, Independent School District 4.5s of 2031 yielded 2.93%, 12 basis points lower than where they traded Wednesday.

Bonds from an interdealer trade of Louisiana’s St. John Baptist Parish 5.125s of 2037 yielded 4.53%, seven basis points lower than where they traded Wednesday.

Bonds from an interdealer trade on Dallas Fort Worth International Airport 5s of 2035 yielded 3.82%, two basis points lower than where they traded Wednesday.

Bonds from an interdealer trade of Georgia’s Valdosta and Lowndes County Hospital Authority 5s of 2041 yielded 3.12%, one basis point lower than where they traded Wednesday.

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