NEW YORK — Primary issuance Wednesday has energized the secondary market with new names. And the market is showing some appetite as sellers have been reaching to entice buyers, a trader in New York said.
“Certainly, when you go in to buy something, you’re getting it cheaper,” a trader in New York said. “People want to make a deal out there; they want to trade some bonds. If you throw them an appropriate number, they’re willing to hit it.”
A large new issuance, from the New York Local Government Assistance Corp. on the competitive side of the market, has been well-priced, the trader added. And thus, some deals are resurfacing in the secondary for investors hungry for new product.
“It’s the only paper in the market that’s new,” he said. “New issuance has helped us put some different names in the market, that’s for sure.”
Tax-exempt yields are steady across all but the belly of the curve, according to the Municipal Market Data scale. Yields for maturities in 2018 through 2028 are flat to one basis point firmer.
Treasury yields, after starting the morning firmer, have retraced their steps as the day’s session crossed into the afternoon. The 10-year benchmark yield has risen four basis points to 2.19%.
The 30-year yield has skipped up two basis points to 3.55%. The two-year yield has held steady at 0.21%.
Munis on Tuesday saw the benchmark 10-year yield slip one basis point to 2.26%. The 30-year yield held steady at 3.89%.
The two-year yield remained at 0.30% for a 15th straight session, perched at its lowest level in more than 40 years.
As new issuance for the week before Labor Day typically is rather low, this week is not expected to be any different. According to industry estimates, municipal bond sales scheduled for this week should total a scant $1.2 billion, compared to a revised $4.4 billion last week.
In competitive deals, Wells Fargo Securities won $247.8 million of Florida State Board of Education lottery revenue refunding bonds. The bonds are rated A1 by Moody’s Investors Service, AAA by Standard & Poor’s and A-plus by Fitch Ratings.
Yields range from 0.85% with a 5.00% coupon in 2014 to 3.40% with a 4.00% coupon in 2023.
Bank of America Merrill Lynch won $191.2 million of New York Local Government Assistance Corp. subordinate lien refunding bonds. The bonds are rated AAA by Standard & Poor’s and AA by Fitch Ratings.
Yields ranged from 0.35% with a 5.00% coupon in 2014 to 2.11% with a 5.00% coupon in 2020. Debt maturing in 2012, 2013, 2017, and 2021 was sold but not available.
