Supply continued to emerge in the primary markets Wednesday as more large borrowers tested demand, putting pressure on the secondary markets.
"Bids wanted are coming up from customers in decent sizes," a New York trader said. "It's a few basis points weaker, more so on the long end."
In the primary, the largest deal of the week is expected to price Wednesday. Citi issued a premarketing wire for $719.2 million of Denver Airport System subordinate-lien bonds on behalf of the Department of Aviation. The bonds are rated A2 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.
The first series of $326.1 million is subject to the alternative minimum tax. Yields ranged from 1.34% with a 4% coupon in 2015 to 5.35% with a 5.25% coupon in 2043. The bonds are callable at par in 2023. Spreads ranged from 75 basis points to 140 basis points above Tuesday's Municipal Market Data scale.
In the second series of $393.2 million, yields ranged from 1.04% with a 3% coupon in 2015 to 5.05% with a 5% coupon in 2043. The bonds are callable at par in 2023. Spreads ranged from 45 basis points to 104 basis points above the MMD scale.
Bank of America Merrill Lynch priced for institutions $188.5 million of Tarrant County Cultural Education Facilities Finance Corp. for the Methodist Hospitals of Dallas. The bonds are rated Aa3 by Moody's and AA-minus by Standard & Poor's.
Yields ranged from 0.75% with a 3% coupon in 2015 to 4.91% with a 4.75% coupon and 5.25% coupon in a split 2043. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.
Yields were lowered as much as seven basis points from retail pricing Tuesday on bonds maturing within 10 years. Yields were raised as much as eight basis points on bonds maturing between 2024 and 2031.
In the competitive market, JPMorgan won the bid for $182.7 million of School District of Miami-Dade County, Fla., general obligation school bonds, rated Aa3 by Moody's and A-plus by Standard & Poor's.
Yields ranged from 0.62% with a 4% coupon in 2015 to 4.71% with a 5% coupon in 2043. The bonds are callable at par in 2023.
Tuesday, yields on the Municipal Market Data scale ended as much as five basis points higher. The 10-year yield increased three basis points to 2.74% and the 30-year yield climbed five basis points to 4.01%. The two-year was steady at 0.52% for the third session.
Yields on the Municipal Market Advisors scale also ended as much as five basis points higher Tuesday. The 10-year yield rose three basis points to 2.91% and the 30-year yield rose four basis points to 4.12%. The two-year was steady at 0.56% for the second session.
Treasuries were slightly weaker Wednesday. The benchmark 10-year and 30-year yields rose two basis points each to 2.65% and 3.67%, respectively. The two-year yield rose one basis point to 0.38%.