The municipal bond market was winding up the new supply calendar on Thursday as issuers from Tennessee and Florida sold bonds competitively.
Prices of high-quality municipal bonds were weaker at mid-session, traders said.
Primary Market
Shelby County, Tenn., sold $172.665 million of general obligation refunding bonds in a competitive sale. Wells Fargo Securities won the deal with a true interest cost of 1.5%. The bonds were priced to yield from 0.15% with a 2% coupon in 2015 to 2.11% with a 5% coupon in 2027. The deal is rated Aa2 by Moody's Investors Service and AA-plus by both Standard & Poor's and Fitch Ratings.
The Florida Department of Management Services sold $103.175 million of refunding certificates of participation. Citigroup Global Markets won the COPs with a TIC of 1.8391% and priced them to yield from 0.10% with a 5% coupon in 2015 to 2.29% with a 5% coupon in 2025. The issue is rated Aa2 by Moody's and AA-plus by S&P and Fitch.
Secondary Market
Prices of top-quality municipal bonds were lower on Thursday, according to traders.
The yield on the benchmark 10-year general obligation was up as much as two basis points from 1.89% on Wednesday, while the yield on 30-year GOs was up as much as two basis points from 2.67%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Thursday, with the two-year note yield down to 0.61% from 0.62% on Wednesday. The 10-year yield rose to 2.02% from 1.96%, while the 30-year yield increased to 2.59% from 2.52%.
On Wednesday, the 10-year muni to Treasury ratio was at 96.4% compared to 96.4% on Tuesday, while the 30-year muni to Treasury ratio was at 106.0% versus 106.0%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,743 trades on Wednesday on volume of $10.111 billion. Most active on Wednesday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bonds, Series AA 4 1/4s of 2044, which traded 125 times with an average price of 102.351 and an average yield of 3.949%.
