Traders in the tax-free municipal market moved slowly Monday, preparing for a week of solid new issue volume as prices cheapened ahead of $12.4 billion in deals expected in the next 30 days.
The Bond Buyer's most recent 30-day visible supply showed $8.253 billion in potential volume this week, almost twice as much as the $4.388 billion introduced in the week ended October 18. That includes $5.669 billion in negotiated sales and $2.585 billion competitive, compared with $3.769 billion and $620 million last week, respectively.
"It's pretty quiet today, a lot of people are looking at the new issues," a New York-based trader said in an interview. "The [New York City] Transitional Finance Authority deal is doing well, being relatively well-received. As far as bid, everything's cheaper based on all these new issues flowing into the market."
Traders were relieved to start a week without negative Puerto Rico news-leading headlines, the trader said.
"Bids have improved a little bit thankfully," the trader said. "I'm not seeing a huge amount of Puerto Rico volume out today, hopefully the fire sale is over and we can go back to them a little bit more appropriately."
JPMorgan priced for institutions $1.61 billion of California general obligation bonds Monday, rated A1 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.
Yields on institutional pricing for $708 million of the GOs ranged from 1.58% on 4% coupon bonds maturing in 2018 to 4.92% on 4.875% coupon bonds maturing in 2043. Bonds maturing in 2014 were offered in a sealed bid. They are callable at par in 2023.
On $660 billion of various purpose GOs, yields ranged from 1.48% with 2% coupon maturing in 2018 to 4.6% with a 5% coupon maturing in 2032. The bonds are callable at par in 2023.
Goldman, Sachs & Co. brought $650 million of New York City Transitional Finance Authority bonds to market as well on Monday.
Bonds with a 3% coupon maturing in 2016 were offered with a yield of 0.62%, while 4.5% coupon bonds maturing in 2042 came with a 4.65% yield. Bonds maturing in 2015 were offered as a sealed bid. The bonds are callable at par in 2023.
Yields on the triple-A Municipal Market Data scale were mostly unchanged Monday, with yields jumping as much as one basis point on bonds maturing from 2020 to 2043.
Treasury yields slipped across the curve, with the benchmark 10-year and 30-year yields each rising four basis points to 2.62% and 3.69%, respectively, from Friday. The 2-year yield remained steady to slightly higher around 0.32%.