NEW YORK — The municipal market has found a little energy early Thursday afternoon.
New issuance is finding a ready appetite and the secondary market is jumping in some spots, particularly in the intermediate range.
“We’re seeing a little bit of flow; things getting done in bits and pieces,” a trader in New York said. “People are giving up a little bit, a basis point or two, to push a trade through.”
Tax-exempt yields are firming mildly between maturities of 10 and 20 years, according to the Municipal Market Data scale. Maturities from 2021 to 2031 are flat to three basis points lower. Maturities at the front and back of the curve are steady.
The benchmark 10-year yield Wednesday reached a record low, as measured by MMD, after falling one basis point to 2.09%. It has fallen 15 points since Sept. 1.
The 30-year yield ticked down two basis points on the day to 3.68%, its lowest level since Sept. 28, 2010.
The two-year yield remained unchanged at 0.30% for a 20th consecutive session, hovering at its lowest level in more than 40 years.
“We just bought 2025 paper; 2025 through 2027 looks attractive,” the trader said. “I’m seeing a lot of offers around that area that are attractive. I’m seeing kickers in that neighborhood, with that short 13 or 12 call, which are fantastic. My guys are jumping all over them. That range is doing well.”
Treasury yields, which weakened Wednesday, were mostly back to rallying as Thursday crossed noon. The 10-year benchmark yield fell five basis points to 2.00%.
The 30-year yield also dropped five basis points to 3.32%. The two-year yield is unchanged at 0.21%.
Though holiday-shortened, the week is still expected to see a larger amount of new-issuance than last week’s. Industry estimates place the total for the week at almost $3 billion, versus a rather slight $1.72 billion last week.
The competitive market is expected to be notably lacking in large-scale deals; only a few in excess of $50 million are slated to come to market this week.
In the negotiated market Thursday, Morgan Stanley priced $151.2 million of New York State Mortgage Agency homeowner mortgage revenue bonds in two series. The bonds are rated Aa1 by Moody’s investors Service.
Yields for the first series, at $66.8 million, range from both 1.85% and 1.90% priced at par in a split maturity in 2016 to 4.60% priced at par in 2036. Credits maturing in different maturities of multiple split maturities in 2020 and 2021 were not reoffered for sale.
Yields for the second series, at $84.4 million, range from both 0.60% and 0.70% priced at par in a split maturity in 2013 to 3.40% priced at par in 2022. Debt maturing in different maturities of multiple split maturities from 2015 to 2017 were not reoffered for sale.
Also Thursday, Siebert Brandford Shank & Co. repriced $351.9 million of New York State Thruway Authority state personal income tax revenue bonds. The bonds, priced Wednesday, were rated AAA by Standard & Poor’s and AA by Fitch Ratings.
Yields at the repricing range from 0.48% with a 4.00% coupon in 2014 to 3.30% with a 5.00% coupon in 2026. Debt maturing in 2012 and 2013 were offered in a sealed bid.
There are no more orders for many of the credits maturing in most of the split maturities from 2014 through 2022. Yields at the 10-year mark were raised a basis point at repricing.
