The tax-exempt market posted strong gains for the third session as traders said the secondary continued to bid up prices even after a strong repricings in the primary.
"I was hoping for a turnaround and it happened," a Los Angeles trader said, adding he was selling bonds to pocket a profit. He said primary deals went very well earlier in the week and the secondary was higher on Thursday.
In the primary market Thursday, Siebert Brandford Shank & Co. priced for institutions $570 million of Connecticut general obligation and refunding bonds, rated Aa3 by Moody's and AA by Standard & Poor's, Fitch, and Kroll Bond Rating Agency. Pricing details were not available by press time.
Morgan Stanley priced $271.5 million of Dallas and Fort Worth International Airport joint revenue refunding bonds, subject to the alternative minimum tax. The credit is rated A1 by Moody's and A-plus by Standard & Poor's and Fitch.
Yields ranged from 0.66% with a 5% coupon in 2014 to 3.95% with a 5% coupon in 2035. Bonds maturing in 2013 were not formally re-offered. The bonds are callable at par in 2020.
Bank of America Merrill Lynch priced $255.6 million of Honolulu, Hawaii, wastewater system revenue bonds, rated Aa2 by Moody's and AA-plus by Fitch.
Yields on the first series, $134.7 million, ranged from 0.86% with a 2% coupon in 2017 to 3.24% with a 5% coupon in 2042. The bonds are callable at par in 2022.
Yields on the second series of $120.9 million, ranged from 0.39% with a 3% coupon in 2014 to 3.00% with a 4% coupon in 2030. The bonds are callable at par in 2022.
On Wednesday, the 10-year Municipal Market Data yield and the 30-year yield each fell four basis points to 1.86% and 2.99%, respectively. The two-year closed at 0.29% for the 39th consecutive session.
The gains pushed muni yields back down to levels last seen on Sept. 13, erasing losses made over the past week.
Treasuries were stronger Thursday afternoon but pared most of the gains made in the morning. The benchmark 10-year yield and the 30-year yield fell one basis point each to 1.77% and 2.96%, respectively. The two-year yield fell one basis point to 0.26%.