The tax-exempt market continued on a steady pace as traders said there were both bumps and cuts in the secondary market.
"Munis seem to be holding their own," a San Francisco trader said. "They are up a few basis points maybe, but earlier today I saw cuts on a couple things more on the shorter stuff. But other stuff I'm looking at out for bid seems to be getting better numbers."
He added he is not focusing on the primary market today, but keeping attention on the secondary. "All primary issues have brought stuff into the secondary and we're getting good prices," he said. "There is nothing in the primary because the structure isn't quite what we're looking for so we were hoping new deals would bring out stuff in the secondary and it is."
In the primary market, Bank of America Merrill Lynch won the bid in the competitive market for $400 million of Massachusetts general obligation bonds, rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
Yields ranged from 2.31% with a 4% coupon in 2027 to 2.99% with a 3% coupon in 2030. Bonds maturing between 2031 and 2042 were sold but not available. The bonds are callable at par in 2020.
Citi priced $233.6 million of Allentown, Pa., Neighborhood Improvement Zone Development Authority bonds, rated Baa2 by Moody's. The first series is comprised of $193.1 million of tax-exempt revenue bonds followed by a second series of $40.5 million of federally taxable bonds. Prices were not available by press time.
On Monday, the 10-year Municipal Market Data yield fell one basis point to 1.78%. The 30-year yield finished steady at 2.95% for the third consecutive trading session while the two-year closed flat at 0.29% for the 42nd consecutive session.
The Treasury yield curve flattened as yields on the short end rose and yields in the belly of the curve fell. The two-year yield increased one basis point to 0.28% while the benchmark 10-year yield fell one basis point to 1.71%. The 30-year was steady at 2.90%.