Enthusiasm for this week's new issuances is waning as market participants said that they anticipate most of the deals not to be exciting where yield is concerned.
"Nothing has presented itself as a compelling opportunity," a New York trader said. "There are firm bids, but the market is quiet."
Municipal bond yields maturing in five to 29-years were steady Tuesday. Yields on bonds maturing in one to four-years were under review, according to the Municipal Market Data's triple-A scale.
Piper Jaffray will issue a two-part deal totaling $383.6 million of Beaverton School District 48J, OR consisting of $26.1 million of general obligation tax-exempt deferred interest bonds and $357.5 million of tax-exempt current interest GOs.
"There's a state program with this deal," a second New York trader said. "The underlying rating is strong, and Portland's economy is doing well. Not sure how attractive it will be though."
The deal is rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
Mesirow Financial will bring $300 million of Houston public improvement refunding bonds. The deal is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's.
"Houston is a strong name," the second New York trader said. "People also find it attractive."
RBC Capital Markets will issue $200 million of New Mexico Municipal Energy Acquisition Authority gas supply refunding bonds. The bonds mature serially from 2015 to 2019. There is a put in 2019. The deal is rated Aa3 by Moody's.
"You don't see New Mexico paper that often, so it will be a diversifier," a third trader in New York said. "People are still hungry for anything in the primary after that drought around the July fourth holiday."
New Mexico's total issuance as of July 30 is $859.7 million, compared to $1.14 billion as of the same date in 2013.
The $158.1 million Utah County Hospital revenue health service bonds were priced by Wells Fargo Securities on Tuesday with two May 15, 2045 maturities where one was priced at par with a 4% coupon, and one has a yield of 3.65% with a 5% coupon.
"Utah has the highest rated health care system," the second trader in New York said. "There should be a little extra yield."
The deal has two sinking funds with two term bonds in 2045, and an optional call at par in 2024. The bonds were rated Aa1 by Moody's Investors Service, and AA-plus by Standard & Poor's.
In the competitive market, Miami-Dade County, FL., will auction $310 million of tax anticipation notes on Tuesday, which will mature in 2015. The deal is rated MIG1 by Moody's.
Harris County, Texas auctioned $225 million tax anticipation notes on Tuesday where Barclays Capital won a $25 million chunk with an effective rate of 0.07% and a 1% coupon. RBC Capital Markets and Wells Fargo Securities also won $25 million portions of the deal that were also priced at a 0.07% effective rate, with RBC's part carrying a 1% coupon and Wells Fargo's with a 2%.
Goldman Sachs and Raymond James & Associates received the two largest $50 million sections. Goldman priced the notes at the same 0.07% effective rate with a 1% coupon, and Raymond James gave them a 0.068% with a 1% coupon.
FTN Financial Capital received $50 million in five $10 million denominations all priced at an 0.07% effective rate and a 1% coupon.
"Texas is not a high tax state so there is more of a national appeal to it," the second New York trader said. The state's economy is doing fine so there was a lot of demand."
The deal is rated F1-plus by Fitch Ratings.
Bank of America won the bid for $100 million of Boston Water and Sewer Commission revenue bonds. Yields ranged from 0.69% with a 5% coupon in 2017 to 3.85% with 3.625% coupon in 2044.
"Boston has a very strong revenue system," the second New York trader said. "Not sure how much off the triple-A scale the deal is, but it was bought up."
The bonds are callable at par in 2024. The deal is rated Aa1 by Moody's, and AA-plus by both S&P and Fitch.
Treasuries were mixed Tuesday, with 30-year yields climbing two basis points to 3.26% and the two-year note falling one basis point to 0.49%. The 10-year benchmark was unchanged at 2.48% from Monday's market close.
