The fallout of the downgrade of Puerto Rico’s Aqueduct and Sewer Authority to junk status continued Wednesday afternoon as secondary trades continued to post losses.

A dealer sold to a customer 5s of 2033 at 5.70%, up 40 basis points from where the bond was sold Tuesday.

A dealer sold to a customer 5.25s of 2042 at 5.81%, up 27 basis points from where it was sold Tuesday.

A dealer bought from a customer 5.125s of 2037 at 6.09%, up from 14 basis points from where the bond was bought Tuesday.

Wednesday morning, bonds from an interdealer trade of 6s of 2038 yielded 5.96%, 23 basis points higher than where they traded Monday.

“We are watching Puerto Rico but we are not active,” a Los Angeles trader said. “Of course when you get downgraded the pricing will drop but we’re not actively trading.”

Outside Puerto Rico, the rest of the municipal bond market was focused on the remainder of the small deals pricing.

“We saw the San Dieguito Union High School District deal and front end of the curve was oversubscribed and bumped,” the trader added. He said the strongest demand was inside 10 years.

De La Rosa priced $157.7 million of San Dieguito Union High School District bonds, rated Aa2 by Moody’s Investors Service. Prices were not yet available.

Bank of America Merrill Lynch priced $94 million of Mesa, Ariz., excise tax revenue obligations, rated Aa3 by Moody’s and AA-plus by Standard & Poor’s. The bonds yielded 2.29% with a 5% coupon in 2027 and 3.40% with a 5% coupon in 2032. Bonds maturing in 2027 are callable at par in 2017 and bonds maturing in 2032 are callable at par in 2022.

In the competitive market, Raymond James won the bid for $80 million of triple-A rated Virginia Housing Development Authority commonwealth mortgage remarketing bonds. The bonds are priced at par with a 0.85% coupon in 2016 to a 3.875% coupon in 2038. The bonds are callable at par in 2022.

Municipal bond market scales ended mostly steady Tuesday after a mixed session Monday.

Yields on the Municipal Market Data triple-A GO scale ended flat to one basis point weaker. The 10-year yield closed steady at 1.94% for the third session while the 30-year yield increased one basis point to 3.11%. The two-year finished flat at 0.31% for the 26th consecutive session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended steady to one basis point weaker. The 10-year and 30-year yields finished steady at 1.99% and 3.20%, respectively. The two-year held at 0.33% for the 21st session.

Treasuries continued to post gains Wednesday afternoon. The benchmark 10-year yield plummeted seven basis points to 1.84% while the 30-year yield dropped six basis points to 3.07%. The two-year yield slid one basis point to 0.25%.

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