High quality credits in the municipal bond market traded stronger Tuesday morning as market participants said mid- to high-rated credits were well received in the primary.
"There is lots of primary and it's going well for solid credits," a Chicago trader said.
One New York trader described the secondary as quiet with a softer tone as most of the attention was focused on the new issues.
The biggest deal of the week priced for institutions on Tuesday. Citi issued a premarketing wire for $1.78 billion of Jefferson County sewer revenue warrants. In the first three series of senior liens bonds, yields were cut five basis points, 13 basis points, and three basis points, respectively, from retail pricing. Yields on the subordinate liens were lowered as much as 25 basis points between 2015 and 2018 but raised 15 and 25 basis points on 2042 and 2053 maturities on the Series 2013 D. Yields were raised as much as 13 basis points in 2050 on the Series 2013 F.
The senior lien bonds are rated BBB by Standard & Poor's and BB-plus by Fitch Ratings. The senior lien series carries insurance from Assured Guaranty Municipal Corp. and ratings of A2 from Moody's Investors Service and AA-minus from Standard & Poor's. The subordinate bonds are rated BBB-minus by Standard & Poor's and BB by Fitch.
On Monday, the triple-A Municipal Market Data scale ended as much as two basis points stronger. The 30-year yield slid two basis points to 4.11%. The two-year and 10-year yields closed unchanged for the third session at 0.33% and 2.61%, respectively.
Yields on the Municipal Market Advisors benchmark scale ended as much as three basis points stronger. The 30-year yield slid two basis points to 4.31%. The two-year and 10-year yields fell one basis point each to 0.38% and 2.68%, respectively.
Treasuries were weaker after a stronger session on Monday. The benchmark 10-year yield rose three basis points to 2.70% and the 30-year yield rose two basis points to 3.78%. The two-year yield increased one basis point to 0.30%.