The tax-exempt market traded several basis points stronger Wednesday afternoon, getting a lift from Treasuries and well-received new deals in the primary.
"It's firmer and trading is a bit heavy too," a Chicago trader said. "Treasuries are right on the same path."
This trader said Puerto Rico bonds were stronger after last week's investor call by the commonwealth and more positive headlines Wednesday morning about the credit. "That press conference seems to be putting a better tone to Puerto Rico."
One CUSIP of Puerto Rico Sales Tax Financing Corp. subordinate 5.25s of 2041 traded in the 75- to 76-dollar range Wednesday morning in block-size trading, up in price from the high 50- to 60-dollar range the credit traded at in mid-October.
In the primary market, Goldman, Sachs & Co. priced for institutions $650 million of triple-A New York City Transitional Finance Authority future tax secured subordinate bonds.
Yields ranged from 0.62% with 3% and 5% coupons in a split 2016 maturity to 4.63% with a 4.5% coupon and 4.53% with a 5% coupon in a split 2042 maturity. Bonds maturing in 2015 were offered via sealed bid. The bonds are callable at par in 2023. Yields were lowered one basis point on bonds maturing in 2033 and two basis points on bonds maturing in 2042 for the second retail order period Tuesday.
The triple-A rated credit yielded two to 35 basis points above Tuesday's triple-A Municipal Market Data scale.
Citi priced for retail $122 million of Tennessee Housing Development Agency residential finance program bonds in two series, rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
The first series, $32 million of bonds subject to the alternative minimum tax, were priced at par to yield 1.20% and 1.30% in a split 2016 maturity and 1.65% and 1.75% in a split 2017 maturity. Bonds maturing in 2014 and 2015 were offered via sealed bid and those maturing in 2043 were not offered for retail. The bonds are callable at par in 2023.
The second series, $90 million of non-AMT bonds, were priced at par to yield 1.75% and 1.85% in a split 2018 maturity to 4.70% in 2033. Bonds maturing in 2043 were not offered for retail and all bonds are callable at par in 2023.
On Tuesday, yields on the triple-A Municipal Market Data scale ended as much as four basis points stronger. The 10-year and 30-year yields fell four basis points each to 2.57% and 4.19%, respectively. The two-year was steady at 0.35% for the eighth session.
Yields on the Municipal Market Advisors benchmark scale also ended as much as four basis points firmer. The 10-year and 30-year yields fell three basis points each to 2.73% and 4.32%, respectively. The two-year was unchanged at 0.55% for the 10th session.
Treasuries continued to gain Wednesday afternoon on longer maturing bonds. The 10-year and 30-year yields fell four basis points each to 2.48% and 3.57%, respectively. The two-year yield rose one basis point to 0.31%.