Municipal bonds showed signs of stabilization after a five-day sell off as the market opened Wednesday.
Yields for bonds maturing from five to 20-years lowered to as much as two basis points, while maturities of four years or less held steady, according to MMD data.
The week-long slump was triggered by Federal Reserve chair Janet Yellen's comments indicating interest rates may rise by April 2015, sooner than the market expected. Munis gained Wednesday even after the Commerce Department reported a 2.2% surge in durable goods orders in February, beating estimates of a 0.1% increase by economists polled by Thomson Reuters.
"Any improvement in any of the lagging sectors will have a negative effect on the bond market," a trader in New York said. "Particularly given the comments Yellen has made in the past week or so, people are going to be cautious."
The largest deal of the week, $791 million of California State's Public Works was slated to price Wednesday. The size of the sale was reduced by $2 million, after opening to retail orders Tuesday.
Citigroup Global has the written award on the two-part $265.03 million Anaheim Public Financing Authority lease revenue bonds for the Anaheim Convention Center Expansion Project. Yields on the $257.55 million part range from 0.2% with a 2% coupon maturing in 2015 to 4.45% with a 5% coupon in 2046. The bonds are callable at par in 2024.
The other $7.48 million are federally taxable and priced at par, with coupons of 0.50% in 2015 and 0.85% in 2016.and have no call option. The bonds are rated AA-negative by Standard & Poor's and Fitch Ratings.
Loop Capital Markets is bringing to market $235.59 of Pennsylvania Turnpike Commission revenue bonds. A retail order period was held on Tuesday. The bonds are rated A1 by Moody's, and A-plus by both S&P and Fitch.
The Connecticut Housing Finance Authority's Housing Mortgage Finance Program's $100 million issuance is also entering its institutional sale period on Wednesday, after the bonds were available to retail investors Tuesday. It's a two-part issuance with the first series totaling $54.39 million and the second $45.61 million. Bank of America Merrill Lynch was the managing underwriter. The bonds are rated Aaa by Moody's and AAA by S&P.
Bank of America Merrill Lynch is also holding a retail order period for $238.59 of Orlando, Fla., contract tourist development tax payment revenue bonds on Wednesday. The bonds' institutional sale begins on Thursday. The bonds are rated Aa2 by Moody's and AA-plus by S&P.
Treasury yields were mixed on Wednesday morning as the 10-year and 30-year strengthened by two and one basis point respectively, to 2.73% and 3.57%, respectively, and the two-year note weakened by two to 0.46%.
