The municipal bond market traded firmer Thursday morning, following a stronger Treasury market, as Janet Yellen spoke in front of the Senate Banking Committee during the confirmation hearing for her nomination as Federal Reserve Board chair.
As the week's largest deals priced for institutions Thursday, secondary trading picked up. "It's a little quiet out there although there is some turnover in the secondary," a New York trader said.
In the primary market, RBC Capital Markets is expected to price for institutions $641.4 million of California State Public Works Board lease revenue bonds, rated A2 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch Ratings.
In retail pricing Wednesday, yields ranged from 1.09% with 4% and 5% coupons in a split 2017 maturity to 5.10% with a 5% coupon in 2038. Bonds maturing in 2016 were offered via sealed bid and portions of bonds maturing between 2027 and 2038 were not offered for retail. The bonds are callable at par in 2023.
Morgan Stanley priced for institutions $306.2 million of New Jersey Building Authority revenue bonds, rated A1 by Moody's and A-plus by Standard & Poor's and Fitch.
The first series of $47.6 million of bond anticipation notes yielded 0.67% with a 3% coupon in 2016. The bonds are callable at par in 2015.
Yields on the second series of $258.6 million of revenue refunding bonds ranged from 0.49% with a 3% and 5% coupon in a split 2015 maturity to 4% priced at par in 2027. The bonds are callable at par in 2023.
Yields on bonds maturing in 2015 and 2016 were lowered two basis points each from retail pricing. Yields on bonds maturing between 2021 and 2027 were lowered as much as three basis points from retail pricing.
On Wednesday, the triple-A Municipal Market Data scale ended flat after two weaker sessions. The 10-year yield and 30-year yields were flat at 2.62% and 4.16%, respectively. The two-year was steady for the 11th session at 0.34%.
Yields on the Municipal Market Advisors benchmark scale fell as much as six basis points Wednesday after two sessions of losses. The 10-year yield fell three basis points to 2.74% and the 30-year yield dropped two basis points to 4.36%. The two-year yield dropped four basis points to 0.44%.
Treasuries were stronger for the second session on Thursday morning. The two-year and benchmark 10-year yields fell one basis point each to 0.31% and 2.72%, respectively. The 30-year yield fell five basis points to 3.79% as Yellen testified before the Senate Banking Committee, which will consider her nomination to chair the Federal Reserve Board.