The tax-exempt market slowed down Tuesday afternoon for traders in the retail market despite a flurry of new deals being priced in the primary.
One trader said the deals being priced are targeting institutional investors, and there is no incentive to push his retail buyers into the muni market right now.
Regarding the $9.8 billion Texas transportation and revenue anticipation note deal, a trader located in the Southwest said he is not following it. "It is just not our cup of tea," he said. "That's an institutional type block deal and not something retail would care about."
And even outside that deal, the market was quite. "It's pretty quiet. I think people are winding up vacations and starting school" and these distraction are keeping buyers out of the market.
He added muni-to-Treasury ratios are lower than they've been during the summer and there is little incentive to push people into munis. "We are going to have to get cheaper."
Overall, the market was steady. "It's not moving one way or the other and there isn't enough activity to tell. It barely has a pulse."
In the primary, Texas auctioned $9.8 billion of Trans, rated MIG-1 by Moody's Investors Service, SP-1-plus by Standard & Poor's, and F1-plus by Fitch Ratings.
JPMorgan won the bid for $5.22 billion of notes, which will yield 0.22% and 0.23% with a 2.5% coupon.
Citi won the bid for $2 billion at yields of 0.20%, 0.21%, and 0.23% with a 2.5% coupon.
Bank of America Merrill Lynch won the bid for $1.05 billion at yields of 0.22%, 0.23%, and 0.24% with a 2.5% coupon.
Wells Fargo Securities won the bid for $1 billion at yields of 0.22%, 0.23%, and 0.24% with a 2.5% coupon.
RBC Capital Markets won the bid for $325 million at yields of 0.21% and 0.24% with a 2.5% coupon.
Piper Jaffray won the bid for $100 million at a yield of 0.23% with a 2.5% coupon.
Goldman, Sachs & Co. won the bid for $80 million at yields of 0.23% and 0.24% with a 2.5% coupon.
Morgan Stanley won the bid for $25 million at a yield of 0.24% with a 2.5% coupon.
JPMorgan priced for institutions $524.2 million of New York State Thruway Authority personal income tax revenue bonds, following retail pricing Monday. The bonds are rated AAA by Standard & Poor's and AA by Fitch.
Yields ranged from 0.52% with 2% and 4% coupons in a split 2015 maturity to 3.03% with a 5% coupon in 2032. The bonds are callable at par in 2021 except for credits maturing in 2022. Yields were lowered two and three basis points on credits maturing between 2017 and 2021 from retail pricing.
Citi priced $366.9 million of Dallas waterworks and sewer system revenue refunding bonds, $106.9 million taxable and $260 million tax-exempt. The credit is rated AAA by Standard & Poor's. Prices were not available by press time.
On Monday, the 10-year Municipal Market Data yield finished steady at 1.87% for the fourth consecutive trading session while the 30-year closed flat at 3.01% for the third sessions. The two-year closed at 0.29% for the 18th straight session.
Treasuries continued to weaken Tuesday afternoon. The benchmark 10-year yield and the 30-year yield jumped three basis points each to 1.85% and 2.96%, respectively. The two-year yield rose one basis point to 0.30%.