A lackluster 10-year Treasury auction gave way to a weaker secondary muni market as traders said yields were two to three basis points higher in afternoon trading.
Still, the largest deal of the week priced and was bumped as much as 10 basis points on certain maturities.
"The 10-year Treasury auction was 2.67% and the market is weaker," a New York trader said. "But it looks like Denver did go well," referring to the $719.2 million Denver Airport System subordinate-lien bonds priced by Citi 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 1.24% with a 4% coupon in 2015 to 5.33% with a 5.25% coupon in 2043. The bonds are callable at par in 2023.
In the second series of $393.2 million, yields ranged from 0.94% with a 3% coupon in 2015 to 5.05% with a 5% coupon in 2043. The bonds are callable at par in 2023.
Bank of America Merrill Lynch repriced 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 5.00% with a 5.25% coupon and 5.08% with a 5% coupon in a split 2043. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.
In repricing, yields were raised three basis points on bonds maturing in 2027, five basis points on bonds maturing in 2028, and nine basis points on bonds maturing in 2043. In preliminary pricing, yields were lowered as much as seven basis points from retail pricing 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. Traders said balances were left of bonds maturing between 2024 and 2027 as well as 2037 and 2038, but overall the deal was well received.
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 continued to weaken Wednesday afternoon. 10-year and 30-year yields rose three basis points each to 2.66% and 3.68%, respectively. The two-year was steady at 0.37%.