Activity in the municipal market has picked up as some of the week's calendar arrives, providing an overall tone of strength.
And despite the greater emphasis on the primary, more participants have joined in the secondary, traders report.
"The market seems firm; there is pretty good flow in the secondary," a trader in Atlanta said. "There's a little bit of focus on the primary market, but there's a decent mix of people in the secondary to keep that rolling, from retail to institutional interest on across the board today."
Tax-exempt yields have responded, he added. They're outperforming Treasury yields in the intermediate range of the curve, though not quite in longer maturities.
"Right around five years has been doing pretty well, where you can get 1.50% or better," the trader said. "That seems like it's gotten some interest."
As the week progresses and more large deals arrive, that could change. An estimated $9.65 billion of new volume should reach the market, Ipreo LLC and The Bond Buyer report.
Last week, a revised $5.38 billion arrived, according to Thomson Reuters. This week, a $2.9 billion Texas transportation deal, expected from the Grand Parkway Transportation Corp., should top the ledger.
In the competitive market, Citi won $616.9 million of Dormitory Authority of the State of New York state personal income tax general purpose revenue bonds. The credits are rated AAA by Standard & Poor's and AA by Fitch Ratings.
Yields range from 0.45% with a 5.00% coupon in 2015 to 4.43% with a 5.00% coupon in 2043. The bonds are callable at par in 2023.
In the negotiated market, Goldman, Sachs & Co., priced $218.3 million of Illinois State Toll Highway Authority toll highway senior revenue refunding bonds. The bonds are rated Aa3 by Moody's Investors Service, AA-minus by Standard & Poor's and Fitch. Yields range from 1.06% with a 5.00% coupon in 2016 to 1.88% with a 5.00% coupon in 2018.
Wells Fargo Securities held preliminary pricing for $129.6 million of San Antonio limited general obligation bonds. The bonds are rated triple-A by the major credit ratings agencies.
Yields range from 0.40% with a 4.00% coupon in 2015 to 4.04% with a 5.00% coupon in 2033. The bonds are callable at par in 2022.
Piper Jaffray & Co. is expected to price $228 million of University of Connecticut general obligation bonds sometime Tuesday; the bank held a second day of retail Monday for the GOs. The bonds were rated Aa3 by Moody's Investors Service, AA by Standard & Poor's and AA-minus by Fitch.
Yields on the first series of $174.2 million ranged from 0.50% with a 3% coupon in 2015 to 4.32% with a 4.25% coupon in 2033. Bonds maturing in 2014, 2030 and 2032 were not offered for retail. The bonds are callable at par in 2023.
Yields were lowered as much four basis points at five and six years, and one or two basis points at the short and far ends the curve. Yields on the second series of $53.9 million ranged from 0.40% with a 3% coupon in 2015 to 3.13% with a 4% coupon in 2024. Bonds maturing in 2014 were not offered to retail investors. The bonds are callable at par in 2023.
Yields were lowered as much as five basis points. Institutional pricing is expected to be held Tuesday.
Tax-exempt yields have maintained firmness in the belly of the curve, according to one market gauge. Yields are steady to two years and beyond 14 years. Those between four and 14 years are flat to five basis points lower, with the greatest strength at five and six years.
The 10-year triple-A tax-exempt steadied at 2.66%, according to the Municipal Market Data scale read. The 30-year yield remained at 4.00%, while the two-year held at 0.45% for the third session.
Yields on the Municipal Market Advisors 5% scale ended mostly flat on Monday, falling one basis point at six years. The 10-year and 30-year yields held at 2.84% and 4.11%, respectively. The two-year remained at 0.54% for the third straight session.
Treasuries are slightly stronger across the curve. The benchmark 10-year yield has inched down one basis point to 2.54%. The two-year yield has slipped one basis point to 0.33% and the 30-year yield has decreased two basis points to 3.59%.