The tax-exempt market traded on a better tone Thursday afternoon as the 10-year Treasury yield fell back down to 2.00%, helping bids in the muni market.

"A few bids were slightly weaker, but it's nothing too significant," a New Jersey trader said. "Any changes this week are much more noticeable in the primary market. Not so much in the secondary."

In the primary market, this trader said that munis were only a few basis points weaker overall. "If Treasuries continue to climb for a prolonged period of time, munis may be affected. But there probably is not much movement until then."

Morgan Stanley priced $111.2 million of Illinois Finance Authority revenue bonds, rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's.

Yields ranged from 3.51% with a 4% coupon in 2033 to 3.52% with a 5% coupon in 2042. The bonds are callable at par in 2022.

Morgan Stanley priced $93.7 million of triple-A rated Fairfax County, Va., Water Authority water refunding revenue bonds in two series.

Bond in the first series, $57.4 million of federally taxable bonds, were priced at par to yield from 0.35% in 2014 to 3.405% in 2030. The bonds had spreads ranging from 13 basis points to 140 basis points above the comparable Treasury yield. The credits are callable at par in 2023.

Yields on the second series, $36.3 million, ranged from 0.20% with a 2% coupon in 2014 to 2.73% with a 4% coupon in 2032. The bonds are callable at par in 2023.

In the competitive market, Ohio auctioned $265.6 million of higher education general obligation bonds, rated Aa1 by Moody's and AA-plus by Standard & Poor's.

Citi won the bid for the first pricing of $198.7 million. Prices were not yet available.

JPMorgan won the bid for the second pricing of $66.9 million. Yields ranged from 0.80% with a 5% coupon in 2017 to 2.20% with a 5% coupon in 2024.

On Wednesday, municipal bond market reads finished weaker for the second session.

The Municipal Market Data triple-A GO scale ended steady as much as four basis points lower. The 10-year yield and the 30-year yield jumped four basis points each to 1.85% and 2.92%, respectively. The two-year was steady at 0.32% for the third session.

The Municipal Market Advisors 5% coupon triple-A benchmark scale ended as much as four basis points weaker. The 10-year yield rose three basis points to 1.87% while the 30-year yield increased four basis points to 2.99%. The two-year closed unchanged at 0.35% for the 13th session.

Treasuries were stronger Thursday afternoon. The benchmark 10-year yield dropped three basis points to 2.00% while the 30-year yield fell five basis points to 3.18%. The two-year yield fell two basis points to 0.27%.

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