NEW YORK – The tax-exempt market was stronger Wednesday for the sixth session as some primary deals were priced ahead of schedule to take advantage of the recent rally.
“It’s more of an underlying good tone,” an Atlanta trader said. “There is interest in bonds from retail to institutions. It has been a big help not to have supply this week. It allows people to get out of deals they’ve had on their balances. And turnover shows that.”
He added he was not participating in any deals this week but has seen good subscription on deals. “It’s harder to get bonds you want,” he said. “Anything that was lying around last week is getting cleaned up.”
Munis were slightly stronger Wednesday, according to the Municipal Market Data scale. Yields inside two years were steady while yields on three- to 11-years fell up to two basis points. Outside 12 years, yields were flat.
On Tuesday, the two-year yield finished steady at 0.36% for its eighth consecutive trading session. The 10-year yield dropped six basis points to 2.08% while the 30-year yield closed down three basis points to 3.37%.
Treasuries were mostly flat Wednesday afternoon. The two-year yield rose one basis point to 0.34% while the benchmark 10-year yield and the 30-year yield were steady at 2.19% and 3.30%.
In the primary market, Wells Fargo priced for institutions $200 million of Rochester, Minn., health care facilities revenue bonds for the Mayo Clinic. The bonds are rated Aa2 by Moody’s Investors Service and AA by Standard & Poor’s. Pricing details were not yet available.
Bank of America Merrill Lynch priced $149 million of Wisconsin Health & Educational Facilities Authority ministry health care bonds. They are rated A-plus by Standard & Poor’s. Pricing was not yet available.
Barclays repriced $143.8 million of Wisconsin general obligation refunding bonds, rated Aa2 by Moody’s and AA by Standard & Poor’s and Fitch Ratings.
Yields ranged from 1.46% with a 5% coupon in 2018 to 3.16% with a 5% coupon in 2029. The bonds are callable at par in 2022.
In the competitive market, Wells Fargo won the bid for $226.9 million of Florida State Board of Education public education capital outlay refunding bonds, rated Aa1 by Moody’s and AAA by Standard & Poor’s and Fitch.
Yields ranged from 0.25% with a 5% coupon in 2013 to 2.55% with a 4% coupon in 2023. The bonds are callable at par in 2021.
In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed firming over the past week.
A dealer sold to a customer New York Liberty Development Corp. 4s of 2035 at 3.94%, 16 basis points lower than where they traded last week.
A dealer sold to a customer Los Angeles County Metropolitan Transportation Authority 5s of 2018 at 1.47%, 15 basis points lower than where they traded a week before.
A dealer sold to a customer Metropolitan Transportation Authority 6.668s of 2039 at 4.90%, 13 basis points lower than where they traded two weeks ago.
A dealer bought from a customer Maryland Health and Higher Educational Facilities Authority 4.25s of 2034 at 4.26%, four basis points lower than where they traded a week prior.