After four consecutive sessions of posting losses, the municipal bond market outperformed Treasuries Thursday morning as yields fell faster than Treasury yields.
Even with a firmer market, the new-issue market was priced cheap this week and deals continued to come cheap Thursday.
"Munis are outperforming Treasuries," a New York trader said. "The new issue deals this week have been priced very attractively. And even after bumps in prices of as much as 10 bps in some cases, they're still very attractive."
Thursday, Goldman, Sachs & Co. was expected to price $425 million of Illinois State Toll Highway Authority senior revenue refunding bonds, but the underwriter moved the deal to day-to-day status.
Loop Capital Markets priced $401.8 million of Dallas-Fort Worth International Airport joint revenue refunding bonds, rated A2 by Moody's Investors Service, A-plus by Standard & Poor's, and A by Fitch Ratings.
Yields ranged from 1.00% with a 5% coupon in 2015 to 5.04% with a 5% coupon in 2033. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023 except for bonds maturing between 2022 and 2026 which are callable at par in 2021.
Bank of America Merrill Lynch held preliminary pricing for $152.1 million of triple-A rated Tyler Independent School District, Texas, unlimited tax school building bonds. The bonds are insured by the Permanent School Fund Guarantee Program.
Yields ranged from 0.47% with a 4% coupon in 2015 to 4.39% with a 5% coupon in 2043. The bonds are callable at par in 2023.
In the competitive market, triple-A rated Utah is expected to auction $217 million of general obligation bonds.
Wednesday, yields on the Municipal Market Data scale ended as much as five basis points higher. The 10-year yield increased one basis point to 2.75% and the 30-year yield climbed five basis points to 4.06%. The two-year was steady at 0.52% for the fourth session.
Yields on the Municipal Market Advisors scale also ended as much as four basis points higher Wednesday. The 10-year yield rose one basis point to 2.92% and the 30-year yield rose four basis points to 4.16%. The two-year was steady at 0.56% for the third session.
Treasuries were stronger Thursday morning after mostly weakening Tuesday and Wednesday. The benchmark 10-year yield slid nine basis points to 2.59% and the 30-year yield fell five basis points to 3.64%. The two-year yield dropped three basis points to 0.34%.
