The tax-exempt market traded lower Tuesday afternoon, despite a relatively light new issue calendar, as yields in both the primary and secondary market rose.
"The calendar is not big this week but there is a focus on the primary today and the $700 million Maryland GO deal Wednesday," a New York trader said. "That's causing high-grade spreads to widen."
He added that the secondary also traded lower. "Bids are definitely weaker by three to four basis points. There is a fair amount of trades going through. It's just weak."
In the primary market Tuesday, Citi priced for retail $230 million of Connecticut general obligation bonds, rated Aa3 by Moody's Investors Service and AA by Standard & Poor's, Fitch Ratings, and Kroll Bond Ratings. Institutional pricing is expected Wednesday.
Yields ranged from 1.07% with a 2% coupon in 2019 to 3.30% priced at par and 3.07% with a 4% coupon in a split 2033 maturity. The bonds are callable at par in 2023.
JPMorgan priced $224.1 million of Fulton County, Ga., water and sewerage revenue refunding bonds, rated Aa3 by Moody's and AA-minus by Standard & Poor's and Fitch.
Yields ranged from 2.45% with a 5% coupon in 2025 to 3.38% with a 4% coupon in 2035. The bonds are callable at par in 2023.
In the competitive market, Citi won the bid for $308 million of Lower Colorado River Authority in Texas revenue bonds, rated A2 by Moody's, A by Standard & Poor's, and A-plus by Fitch. Pricing details were not available by press time.
On Monday, municipal bond market scales ended steady to one basis point weaker.
Yields on the Municipal Market Data triple-A GO scale ended as much as one basis point higher. The 10-year yield and the 30-year yield rose one basis point each to 1.79% and 2.91%, respectively. The two-year closed at 0.31% for the 10th straight session.
Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale closed as much as one basis point higher. The 10-year and the 30-year yield ended flat at 1.82% and 2.98%, respectively. The two-year was steady at 0.33% for the fifth session.
Treasuries continued to trade weaker Tuesday afternoon. The benchmark 10-year yield jumped three basis points to 1.90% while the 30-year yield rose two basis points to 3.11%. The two-year was steady at 0.25%.