NEW YORK – Buyers looking for longer-dated credits are cleaning up any leftovers from yesterday’s large new-issue calendar, while secondary volume activity is up.
A New York trader said longer-dated credits are trading a few basis points higher. “Buyers are coming in on the long end starting to clean some issues out,” he said, adding that safe haven buying is a contributing factor.
“There have been bidders in the market all week, this trader said, and secondary volume is up from yesterday.
Yields were steady early Wednesday afternoon, according to the Municipal Market Data scale.
On Tuesday, the 10-year yield closed at 2.33% while the 30-year yield finished at 3.81%. The two-year closed flat for its tenth consecutive trading day at 0.42%.
Treasuries were mostly flat from morning trading, but still saw gains from yesterday. The 10- and 30-year yields were down three basis points each to 2.02% and 3.06%, respectively. The two-year weakened, as yields were up one basis point to 0.26%.
Morgan Stanley priced $1.3 billion of New Jersey Transportation Trust Fund Authority transportation system bonds. The credits are rated A1 by Moody’s Investors Service and A-plus by Standard & Poor’s and Fitch Ratings.
Yields ranged from 0.79% with a 4% coupon in 2013 to 5.05% with a 5% coupon in 2042. The bonds are callable at par in 2021.
Barclays Capital priced for retail $787.6 million of Minnesota Tobacco Securitization Authority tobacco settlement revenue bonds. The bonds are rated A by Standard & Poor’s and BBB-plus by Fitch.
Debit on the first series, $81.1 million of taxable bonds, matures in 2014 and 2015 and is priced to yield 237.5 and 287.5 basis points over the comparable Treasury yield.
Yields on the second series, $706.5 million of tax-exempt bonds, ranged from 2.26% with a 3% coupon in 2016 to 5.375% priced at par in 2031. Portions of credits maturing between 2016 and 2031 were not offered for retail. The bonds are callable at par in 2022. On this series, debt maturing between 2023 and 2031 was rated one notch lower at A-minus by Standard & Poor’s.
In the competitive market, Wells Fargo won the bid for $163.4 million of Maryland Economic Development Corp. lease revenue bonds. The credits are rated Aa1 by Moody’s and AA-plus by Standard & Poor’s. Details were not available by press time.
