Dealers unloaded balances left over from the new issues priced earlier in the week Friday morning as half the trading volume came from dealers selling bonds to customers. Puerto Rico trading activity was quiet after the general obligation bonds were put on credit watch negative by Fitch Ratings.
One Chicago trader said dealers were selling out bonds left over from earlier in the week. Over $700 million of bonds were bought by customers and only $359 million bought by dealers. Interdealer trading made up $478 million of the total $1.56 billion traded as of Friday morning.
Trading of all Puerto Rico bonds was down 58% from the average of the last five trading sessions following Fitch's announcement that the GOs were put on credit watch negative. The bonds are currently rated BBB-minus. The Sales Tax Financing Corp. senior lien bonds were reaffirmed at AA-minus and the subordinate debt at A-plus.
In the primary market Friday, Citi priced its first retail order period for $1.8 billion of Jefferson County, Ala., sewer revenue warrants. The senior lien bonds are rated BBB by Standard & Poor's and BB-plus by Fitch. The subordinate bonds are rated BBB-minus by Standard & Poor's and BB by Fitch. The deal holds insurance from Assured Guaranty Municipal Corp. with a rating of A2 by Moody's Investors Service and AA-minus by Standard & Poor's.
On Thursday, the triple-A Municipal Market Data scale ended as much as three basis points firmer. The 30-year yield fell three basis points to 4.13%. The two-year and 10-year yields slid one basis point each to 0.33% and 2.61%, respectively.
Yields on the Municipal Market Advisors benchmark scale fell as much as six basis points on Thursday. The 10-year yield fell four basis points to 2.70%. The two-year and 30-year yields dropped three basis points each to 0.41% and 4.33%, respectively.
Treasuries were weaker after two consecutive sessions of gains. The benchmark 10-year yield rose two basis points to 2.71%. The two-year and 30-year yields increased one basis point each to 0.30% and 3.80%, respectively.
