Several Illinois taxable deals are expected to price Wednesday coming off strong reception of a tax-exempt Illinois issue Tuesday.
These deals – and the primary market in general – look expensive this week. “Everything coming is tight,” a Chicago trader said. “Everyone is expecting a little performance and we got some. So we are waiting for the auctions to see if there is a trend here.”
Early Wednesday, a few bid-lists surfaced. “There are some bids shown. It’s not up or down but sideways. If the 10-year Treasury goes back down to 1.70% then munis are right where they should be.”
Wells Fargo should price $200 million of Illinois Finance Authority taxable debt for the University of Chicago. The deal comes after a $150 million tax-exempt portion Tuesday sold by Morgan Stanley. The bonds are rated Aa1 by Moody’s Investors Service, AA by Standard & Poor’s, and AA-plus by Fitch Ratings.
Ramirez & Co. is expected to price $127.6 million of Illinois Housing Development Authority taxable housing bonds, rated Aa3 by Moody’s and AA by Standard & Poor’s.
Morgan Stanley is expected to price $200 million of Colorado’s Regional Transportation District sales tax refunding bonds, rated Aa2 by Moody’s, AA-plus by Standard & Poor’s, and AA by Fitch.
In the competitive market, triple-A rated Massachusetts Water Pollution Abatement Trust should auction $206.3 million in two pricings, including $189.6 million and $16.7 million.
Municipal bond scales ended up to two basis points weaker Tuesday after yield rose as much as six basis points Monday.
Yields on the Municipal Market Data triple-A GO scale finished as much as yeo basis points higher. The 10-year and 30-year yields increased two basis points each to 1.75% and 2.89%, respectively. The two-year finished flat at 0.29% for the 23rd session.
Yields on the Municipal Market Advisors 5% scale ended also ended up to two basis points higher. The 10-year yield rose two basis points to 1.81% and the 30-year yield increased one basis point to 3.02%. The two-year finished unchanged at 0.32% for the 23rd session.
Treasuries were mostly flat Wednesday morning. The two-year and 30-year yields were steady at 0.24% and 3.00%. The benchmark 10-year yield slid one basis point to 1.78%.