NEW YORK – The tax-exempt market ended the week on firming footing as traders noted the market had a good tone. Given the fact that many deals in the primary were over $500 million, they were well received and many were bumped in repricings.
“It’s kind of winding down as people get ready for the holiday,” a trader in the Southwest region said, referring to the Fourth of July holiday next Wednesday. “Most people will be half staffed next week. And so it was a pretty lack luster day compared to the last few days. We had good activity the last few days and bonds were going away in the retail order period. So the market has a good tone.”
He added that munis are starting to slow down Thursday afternoon. “New issues are going to be down next week and activity will be pretty slow,” he added. “With the holiday falling in the middle of the week, half the desks will take off the first part of the week and the other half will take off the second part of the week.”
Munis were steady Thursday afternoon, according to the Municipal Market Data scale. On Wednesday, the 10-year yield ended flat at 1.86% for the ninth trading session while the two-year ended steady at 0.32% for the 19th straight session. The 30-year yield finished flat at 3.16% for the fourth session.
Treasuries were much stronger Thursday morning. The benchmark 10-year yield dropped five basis points to 1.58% while the 30-year yield fell four basis points to 2.66%. The two-year was steady at 0.31%.
In the primary market, Bank of America Merrill Lynch priced for institutions $1 billion of New York’s Metropolitan Transportation Authority [http://www.bondbuyer.com/issues/121_124/new-york-mta-billion-dollar-bonds-1041318-1.html] bonds, rated A2 by Moody’s Investors Service and A by Standard & Poor’s and Fitch Ratings. Prices were not yet available.
In retail pricing Wednesday, yields ranged from 1.03% with 3% and 4% coupons in a split 2015 maturity to 4.07% with a 4% coupon in 2032. Bonds maturing between 2024 and 2029 were not offered for retail. The bonds are callable at par in 2022.
Keybanc Capital Markets priced $146.2 million of Southeastern Ohio Port Authority hospital facilities revenue refunding and improvement bonds for the Memorial Health System Obligated Group. Details were not available by press time.
In the competitive market, Bank of America Merrill Lynch won the bid for $358.8 million of North Texas Municipal Water District revenue bonds, rated Aa2 by Moody’s and AAA by Standard & Poor’s.
Yields ranged from 0.35% with a 3% coupon in 2013 to 3.39% with a 4% coupon in 2030. Bonds maturing between 2014 and 2017, in 2018, 2019, between 2023 and 2025, in 2027, 2031, and in 2032 were sold but not available. The bonds are callable at par in 2022.
Bank of America Merrill Lynch also won the bid for $125 million of Colorado short-term notes, rated MIG-1 by Moody’s and SP-1-plus by Standard & Poor’s. The bonds yielded 0.18% with a 2% coupon in 2013.