NEW YORK — The secondary market continues its understated performance. But new issuance that has reached the primary market is getting a good reception.
Among the new deals on the day, RBC Capital Markets priced $365.5 million of general obligation bonds for the San Diego Community College District a day early.
“They’re in the retail order period, and it looks pretty strong,” said a trader in San Francisco.
Also, the trader added, JPMorgan priced for retail $236.3 million of waterworks and sewer system revenue refunding bonds for Dallas.
“The Dallas deal may roll into the institutional period,” he said. “The new stuff is pricing well.”
Muni yields remain steady in spots along the curve, according to the Municipal Market Data scale. Yields for maturities between 2016 and 2020 are flat to one basis point higher. The same goes for those from 2036 to 2041. Yields for debt maturing in 2025 and 2026 are flat to one basis point lower.
The two-year yield held to end yesterday’s trading session at 0.42% for the 16th straight session. The benchmark 10- and 30-year muni yields remained at 2.76% and 4.36%, respectively.
After dipping slightly this morning, Treasury yields rebounded to enter the afternoon about where they were at yesterday’s close. So far, the 10-year yield slipped one basis point to 3.12%.
The two-year was steady at 0.44%, and the 30-year yield fell one basis point to 4.38%.
The secondary remains pretty quiet, the trader added. “It went quiet early last week, and really hasn’t come back. The market turned a little negative, and a lot of cash from reinvestment had been spent.”
Because the product broker-dealers bought recently has been sitting on shelves, they’ve stopped buying. In addition, the trader noted, last week saw quite a lot of volatility in the Treasury market.
The holiday-shortened week has seen an expected drop in issuance. Issuers expect to sell an estimated $1.3 billion of munis this week against a revised $8.2 billion that was sold last week.
In negotiated sales, Morgan Stanley priced $105.4 million of Lubbock Health Facilities Development Corporation refunding revenue bonds for St. Joseph Health System.
The bonds were rated A1 by Moody’s Investors Service and AA-minus by both Standard & Poor’s and Fitch Ratings.
Yields range from 1.25% with a 5.00% coupon in 2013 to 4.36% with a 4.25% coupon in 2023. Debt maturing in 2012 was not reoffered.
