Municipal bond yields have changed little as Friday's session crossed into the afternoon.
Next to stronger Treasuries, participants have observed light trading in the muni secondary market. But they spy continued interest there in the week's new issues.
Trading in utility debt securitization tax-exempt bond issue credits for the Long Island Power Authority, a $1.6 billion-issue Goldman, Sachs & Co. brought to market Wednesday, has been strong, a trader in San Francisco said.
"The new issue stuff is rallying pretty good," he said. "The replacement for LIPA deal is up 14-to-15 basis points. I don't see strength in the secondary, with the exception of the re-pricing and re-allocating of some of these new issues."
Falling on the heels of this week's large calendar, estimates for next week's volume point to a lighter selection of new deals. Potential muni bond volume next week should total $2.59 billion, from sales of $8.38 billion this week, per Ipreo, The Bond Buyer and Thomson Reuters.
That breaks down into $1.74 billion of bonds scheduled for negotiated sale next week, versus a revised $6.22 billion that were sold this week. Also, $843.4 million of bonds are scheduled for competitive sale next week, compared with $2.15 billion this week.
The week's numbers likely fail to include $2.2 billion of Foothill/Eastern Transportation Corridor Agency, Calif. toll revenue bonds to restructure its outstanding debt that Barclays priced late Thursday afternoon. A trader in San Francisco said short credits on the deal were oversubscribed; yields had to be cheapened by up to five basis points to clear the longer credits.
Several issues on the negotiated calendar top $100 million, led by Guggenheim Securities, which expects to price $283 million of Pennsylvania Economic Development Financing Authority parking revenue bonds for the Capital Region Parking System. A retail order period will be held Monday, followed by pricing on Tuesday.
RBC Capital Markets should price $141 million of Colorado Board of Governors State University System enterprise revenue bonds on Tuesday.
In the competitive market, Massachusetts is expected to auction $525 million of general obligation bonds, also on Tuesday.
A weekly snapshot of secondary market activity provided by Interactive Data showed that trading this past week continued to make for an active December. Two days this week boasted trade counts above 50,000, something not seen since early September.
Yields on the Municipal Market Data triple-A scale started Friday unchanged through 16 years on the curve. They were up to a basis point lower for maturities beyond 2029.
Muni yields ended Thursday flat for a second straight session, with the benchmark triple-A 10-year yield at 2.72%. The 30-year remained at 4.16%. The two-year held at 0.33% for a 20th straight session.
Yields on the Municipal Market Advisors benchmark triple-A scale weakened slightly on the long end of the curve Thursday. The 10-year and the two-year held at 2.75% and 0.36%, respectively. The 30-year yield ticked up one basis point to 4.40%.
Treasury yields have mostly fallen through early Friday afternoon. The benchmark 10-year yield has dipped two basis points to 2.87%, while the 30-year yield has dropped three basis points to 3.87%. The two-year yield has held at 0.33%.