Retail investors in the municipal bond market showed some life Wednesday morning as two of the week's largest deals held retail order periods.
In a week with just $2.28 billion of expected issuance, $400 million of Metropolitan Transportation Authority bonds and $201 million of Louisiana State Highway bonds got the attention Wednesday of buyers looking to get their hands on new paper.
"Retail is staying involved but it does seem a little slower than normal," one trader in New York said in an interview. "We've been starting each day slowly for some reason, but by the time we get to the afternoon business picks up and we end up with respectable days."
Morgan Stanley led the retail pricing of $400 million of MTA transportation revenue bonds, rated A2 by Moody's Investors Service, A-plus by Standard & Poor's and A by Fitch Ratings.
Yields on the first series of $268.4 million of bonds ranged from 0.49% with a 2% coupon in 2016 to 4.58% with a 5% coupon in 2044. Bonds maturing next year were offered in a sealed bid, and all the bonds are callable at par in 2023.
The second series $131.6 million, saw yields range from 1.30% with a 4% coupon in 2018 to 4.15% with a 5% coupon in 2032.
Citigroup Global Markets brought the $201 million Louisiana highway revenue bonds, which carried an Aa3 Moody's rating and AA-minus scores from S&P and Fitch.
"It looks like the Louisiana deal is being pretty well received, particularly with the 5% coupons maturing in 2034, which are about 52 basis points off the triple-A," the trader said.
Yields according to Municipal Market Data's triple-A scale were steady on the short end Tuesday morning, while bonds maturing from 2017 to 2019 fell as much as two basis points. Bonds beyond that fell as much as a basis point.
The benchmark 30-year Treasury yield was down two basis points to 3.67%, while the 10-year fell to two basis points to 2.70%. The two-year yield fell one basis point to 0.31%.
