NEW YORK – The tax-exempt market continued to slug along Monday afternoon as traders noted the market was struggling to gain steam.
“The market is quiet,” a New York trader said. “It’s maybe slightly weaker with Treasuries but quiet. Everyone is talking about the calendar this week which won’t really pick up until tomorrow. So it’s pretty quiet.”
Munis were steady to slightly weaker Monday, according to the Municipal Market Data scale. Yields inside six years were steady while yields outside seven years rose one basis point.
On Friday, the 10-year yield dropped four basis points to 1.75%, remaining eight basis points above its record low of 1.67% set Jan 18. The 30-year yield dropped four basis points to 3.04%, setting a record low as recorded by MMD. The 3.04% yield beat the previous record of 3.05% set May 14. The two-year yield fell one basis point to 0.32%.
Treasuries were slightly weaker Monday afternoon after a hefty rally Friday. The benchmark 10-year yield rose four basis points to 1.50% while the 30-year yield increased two basis points to 2.54%. The two-year was steady at 0.26%.
In the negotiated market, Goldman, Sachs & Co. held its first day of retail pricing for $800 million of New York City Transitional Finance Authority future tax-secured and tax-exempt subordinate bonds in two series. The bonds are rated Aa1 by Moody’s Investors Service and AAA by Standard & Poor’s and Fitch Ratings.
Yields ranged from 0.55% with 2%, 4%, and 5% coupons in a split 2015 maturity to 3.36% with a 4% coupon in 2039. Credits maturing in 2014 were offered via sealed bid. Bonds maturing from 2024 to 2026, 2028 to 2030, and 2034 to 2038 were not offered for retail. The bonds are callable at par in 2022.
On the competitive calendar, JPMorgan won the bid for $140 million of Ventura County, Calif., short-term notes, rated M1G-1 by Moody’s and SP-1-plus by Standard & Poor’s. Pricing details were not available by press time.
In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed firming over the past week.
Bonds from an interdealer trade of Dormitory Authority of the State of New York 5s of 2022 yielded 1.85%, seven basis points lower than where they traded Thursday.
Bonds from another interdealer trade of Citizens Property Insurance Corp. 5s of 2013 yielded 0.50%, three basis points lower than where they traded Friday.
A dealer bought from a customer California 5.95s of 2018 at 2.61%, three basis points lower than where they traded Thursday.
A dealer sold to a customer Washington 5s of 2023 at 2.30%, two basis points lower than where they traded Wednesday.