Puerto Rico general obligation and Sales Tax Financing Corp. bonds traded in odd-lot and block size trades Tuesday ahead of the commonwealth's investor call at 2 p.m. Eastern.
One Chicago trader said COFINA zeros of 2054 were the most traded of COFINA bonds Tuesday, with $10.1 million traded so far. In an interdealer trade of over $1 million, the bonds yielded 6.90%, about where they traded last week.
One trader in Boston said the overall market looked unchanged, though Puerto Rico trading was mixed. "Some bonds like the senior lien sales tax zeros are actually stronger," he said. "Some of the insured, coupon stuff is slightly weaker. Yield levels are less important than dollar price. Regardless of structure, a lot of bonds like Puerto Rico Aqueduct and Sewer Authority or Puerto Rico Electric Power Authority are trading based on potential recovery or restructuring level, not based on yield."
The general market felt steady to slightly weaker, following Treasuries, as the debt ceiling limit approached. "It's slightly weaker, but I'm seeing some turnover so it's not dead."
RBC Capital Markets priced for retail some of the $209.1 million of Pennsylvania Turnpike Commission bonds. The deal includes $107.4 million of subordinate revenue bonds, rated A3 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch Ratings, and $101.7 million of motor license fund-enhanced turnpike subordinate special revenue bonds, rated A1 by Moody's and AA by Fitch. Institutional pricing is expected Wednesday.
Yields on the first series, $83.6 million of turnpike subordinate revenue bonds, ranged from 0.50% with a 2% coupon in 2014 to 5.18% with a 5.125% coupon in 2043. Portions of bonds maturing between 2026 and 2043 were not offered for retail. The bonds are callable at par in 2023.
The second series, $23.8 million of turnpike subordinate revenue convertible capital appreciation bonds, were not offered for retail.
Yields on the third series, $81.8 million of motor license fund-enhanced turnpike subordinate special revenue bonds, ranged from 0.35% with a 2% coupon in 2014 to 4.52% with a 4.5% coupon in 2031. Portions of bonds maturing between 2026 and 2043 were not offered for retail. The bonds are callable at par in 2023.
The fourth series, $19.9 million of motor license fund-enhanced turnpike convertible capital appreciation bonds, was not offered for retail.
RBC Capital Markets held preliminary pricing for $173.5 million of Florida's Hillsborough County Aviation Authority Tampa International Airport subordinated revenue refunding bonds subject to the alternative minimum tax. The bonds are rated A2 by Moody's and A by Standard & Poor's and Fitch.
Yields ranged from 0.80% with a 4% coupon in 2015 to 5% priced at par and 4.99% with a 5.25% coupon in a split 2030 maturity. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.
This week's deals in a holiday-shortened week come as volume is expected to increase. Nearly $4.2 billion is expected to come to market, up from last week's revised $3.51 billion. In negotiated deals, $3.54 billion should be issued, up from last week's revised $2.79 billion. On the competitive calendar, $655.8 million is expected to be auctioned, down from last week's revised $721.2 million.
On Friday, yields on the triple-A Municipal Market Data scale ended unchanged. The 10-year and 30-year yields were flat for the second session at 2.60% and 4.18%, respectively. The two-year was steady at 0.35%.
Yields on the Municipal Market Advisors benchmark scale also ended mostly flat across the curve. The 10-year yield rose one basis point to 2.75%. The 30-year yield was steady at 4.33% for the second session and the two-year was unchanged at 0.55% for the fourth session.
Treasuries continued to weaken Tuesday afternoon. The benchmark 10-year and 30-year yields rose four basis points each to 2.72% and 3.78%, respectively. The two-year yield rose two basis points to 0.37%.