Despite significant cheapening in municipal bond market, larger competitive deals are seeing fairly decent reception, and the large New York State general obligation deal continued that trend Thursday afternoon.

"As far as I can tell it went alright," a New York trader said. "There are still balances left but that's just because it was a lot of bonds. The tone on the street is there was active trading today."

New York State auctioned $559 million of GOs in three pieces, rated Aa2 by Moody's Investors Service, AA by Standard & Poor's and AA by Fitch Ratings.

JPMorgan won the bid for $336.9 million of tax-exempt GOs. The bonds had coupons ranging from 2% in 2014 to 3.5% in 2043. Prices were not yet available.

Morgan Stanley won the bid for $174.1 million of tax-exempts. Details were not yet available.

Bank of America Merrill Lynch bought $48 million of taxable GOs. The bonds were priced at par to yield from 0.29% in 2014 to 2.45% in 2023.

Outside the New York deal, the rest of the market continued to weaken. "The market is squishy, especially on the long end," a Chicago trader said. "It's selling off but the problem is finding firm, deep bid sides. If you put an offer out on $3 million of bonds and you see a bid for $400 million, it's hard to gauge how dramatic the sell-off really is. Bid sides are light in size and it feels like dealers are not as eager. So it's hard to determine where the bottom is. No one is really stepping up."

JPMorgan priced $356.8 million of Maryland Health and Higher Education Facilities Authority bonds for the University of Maryland Medical System, rated A2 by Moody's, A-minus by Standard & Poor's, and A by Fitch. The bonds include $241.8 million of tax-exempt revenue bonds and $115 million of taxable bonds. Yields on the tax-exempt portion ranged from 0.23% with a 2.00% coupon in 2013 to 4.09% with a 4.00% coupon in a split 2043 maturity.

JPMorgan also priced $206.4 million of University of Massachusetts Building Authority project revenue bonds, rated Aa2 by Moody's, AA-minus by Standard & Poor's, and AA by Fitch.

Yields ranged from 0.28% with a 2% coupon in 2014 to 3.75% with a 4% coupon in 2043. The bonds are callable at par in 2022.

Overall, municipal bond market scales ended weaker Wednesday for the third straight session.

Yields on the Municipal Market Data triple-A GO scale ended as much as seven basis points higher. The 10-year yield jumped seven basis points to 1.90% while the 30-year yield increased six basis points to 3.00%. The two-year closed at 0.31% for the 12th straight session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale closed as much as six basis points higher. The 10-year and the 30-year yield jumped five basis points each to 1.90% and 3.06%, respectively. The two-year was steady at 0.33% for the seventh session.

Treasuries continued to weaken Thursday afternoon. The benchmark 10-year yield and the 30-year yield jumped four basis points each to 1.98% and 3.19%, respectively. The two-year was steady at 0.26%.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.