NEW YORK – The tax-exempt market is showing signs of slowing Tuesday afternoon as vacation mode starts to set in.
“It’s a holiday week so it’s very slow,” said a trader in New Mexico. “There is not a lot going on. There are a couple of new deals but not a whole bunch of anything. It is just a classic holiday week.”
Munis were mostly flat to slightly weaker in early afternoon trading, according to the Municipal Market Data scale. Yields inside 24 years were flat, but yields on the long end rose one basis point.
On Monday, the 10-year muni yield fell one basis point to 1.92%, a record low, as recorded by MMD. The 30-year muni yield fell one basis point to 3.61%. The two-year yield closed flat at 0.36% for its ninth consecutive trading session.
Treasuries continued their sell off, paring gains made the past two trading sessions, and pushing yields back up to levels seen last Thursday. The benchmark 10-year yield jumped 10 basis points to 1.91% while the 30-year yield spiked 12 basis points to 2.91%. The two-year yield rose two basis points to 0.26%.
In the primary market Tuesday, the competitive calendar took the lead.
JPMorgan won the bid for $400 million of Massachusetts general obligation bonds. The credit is rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s and Fitch Ratings.
Yields ranged from 1.05% with a 5% coupon in 2017 to 3.16% with a 3% coupon in 2027. Credits maturing in 2015 and 2016 were not formally reoffered. The bonds are callable at par in 2019.
In the negotiated market, most of the week’s biggest deals, albeit smaller than usual, priced Tuesday.
Barclays Capital priced $67.1 million of Oklahoma’s Beaver County Hospital Authority revenue bonds. The credit is rated A1 by Moody’s, AA-minus by Standard & Poor’s, and A-plus by Fitch. Pricing was not available by press time.
Stifel, Nicolaus priced $32.7 million of Ohio’s Ashtabula Area City School District general obligation refunding bonds. The credit is rated Aa2 by Moody’s. Details were not yet available.
In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed firming in the past week.
A dealer sold to a customer California University Regents 6.583s of 2049 at 5.21%, 15 basis points lower than where they traded the week prior.
A dealer bought from a customer New Jersey Transportation Trust Fund Authority 5s of 2042 at 4.62%, 12 basis points lower than where they traded the week before.
A dealer sold to a customer Houston 6.29s of 2032 at 4.66%, nine basis points lower than where they traded the previous week.
A dealer sold to a customer District of Columbia 5s of 2022 at 2.41%, eight basis points lower than where they traded last week.
