The tax-exempt market continued to focus on the primary this week despite new issues offering relatively low yields.
Traders said better deals can be found in the primary, and so the secondary has taken a backseat.
"This week has been on new deals and they are getting very good reception," an Atlanta trader said. "Most maturities are oversubscribed and not just one or two times, but five or six times oversubscribed. And that creates repricing at lower yields. So there is still a lot of cash out there."
Because of that, the secondary market has been quiet. "The secondary has been slow but any nice quality blocks are getting very good bids. Munis have really outperformed Treasuries this week."
In the primary market, Loop Capital Markets priced for institutions $600.7 million of California State Public Works Board lease revenue and lease revenue refunding bonds, rated A2 by Moody's Investors Service and BBB-plus by Standard & Poor's and Fitch Ratings.
Yields on the first series, $459.3 million of lease revenue bonds for various capital projects, ranged from 0.89% with a 4% coupon in 2015 to 4.00% with a 5% coupon in 2037. The bonds are callable at par in 2022. Yields were lowered one and two basis points from retail pricing.
Yields on the second series, $53.6 million of lease revenue bonds for Riverside Campus projects, ranged from 1.13% with a 3% coupon in 2016 to 4.10% with a 4% coupon in 2037. The bonds are callable at par in 2022. Yields were lowered one and two basis points on the short end from retail pricing and increased as much as six basis points outside of 2023 maturities.
Yields on the third series, $67.2 million of lease revenue refunding bonds for the California State Prison in Lassen County, Susanville, ranged from 0.87% with a 5% coupon in 2015 to 1.62% with a 5% coupon in 2018.
The fourth series, $20.6 million of lease revenue refunding bonds for the Richmond Laboratory project, yielded 0.75% with a 3% coupon in 2014 and 0.89% with a 4% coupon in 2015. Credits maturing in 2013 were offered via sealed bid. Yields were lowered two basis points on the 2015 maturity from retail pricing.
Siebert Brandford Shank & Co. priced $294.5 million of Dallas and Fort Worth International Airport joint revenue refunding bonds, rated A1 by Moody's and A-plus by Standard & Poor's and Fitch.
Yields ranged from 0.33% with a 2% coupon in 2013 to 3.40% with a 5% coupon in 2035. The bonds are callable at par in 2022.
Barclays priced $200 million of Baylor University taxable bonds, rated A-plus by Standard & Poor's and Fitch. The bonds were priced at par to yield 4.313% in 2042. The bonds were priced 135 basis points above the comparable Treasury yield.
On Wednesday, the
Treasuries were mixed Thursday afternoon. The two-year yield fell one basis point to 0.29% while the benchmark 10-year yield increased one basis point to 1.82%. The 30-year was steady at 2.99%.
