Activity in the tax-exempt market was higher than a typically quiet Friday as next week's largest deal held a retail order period and munis traded weaker after a 20 basis point drop in yields over the last eight sessions.

Positive economic data Friday morning sent Treasury yields rising and tax-exempts followed, though at a lag.

Bank of America Merrill Lynch held the first of two retail order periods for $806.8 million of Hawaii general obligation bonds, rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings. A second retail order period is expected Monday followed by institutional pricing Tuesday.

Yields on the first series of $635 million ranged from 1.16% with a 5% coupon in 2018 to 4.14% with a 4% coupon in 2033.Portions of bonds maturing between 2025 and 2033 were not offered for retail. The bonds are callable at par in 2023.

The second series of $35.6 million was offered via sealed bid.

The third series of $58.6 million yielded 0.37% with 3% and 5% coupons in a split 2015 maturity.

The fourth series of $27 million yielded 0.57% with 3% and 5% coupons in a split 2016 maturity.

Yields on the fifth series of $50.6 million ranged from 0.84% with a 3% coupon in 2017 to 2.66% with a 3% coupon in 2023.

On Thursday, yields on the triple-A Municipal Market Data scale ended mostly flat across the board. The two-year and 10-year yields were steady for the third session at 0.34% and 2.44%, respectively. The 30-year finished flat at 4.04% for the second session.

Yields on the Municipal Market Advisors benchmark scale ended mostly steady across the curve. The two-year and 10-year yields were flat for the second session at 0.48% and 2.59%, respectively. The 30-year was flat for the fifth session at 4.23%.

Treasuries continued to weaken. The benchmark 10-year yield jumped nine basis points to 2.63% and the 30-year yield rose seven basis points to 3.70%. The two-year yield rose one basis point to 0.33%.


 

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