The tax-exempt market reversed course Wednesday, following Treasuries lower, after 12 sessions of trading flat to firmer.
One trader said the muni market felt weaker in morning trading as market participants resisted the near record low yields. "The market is down a touch," a New York trader said.
While most of the biggest deals priced for institutions Tuesday, a few deals were left to price Wednesday. Focus should stay on the primary market through Wednesday with the secondary market seeing more activity at the end of the week. "The secondary will get busy Thursday and Friday," the trader said.
In the primary market, Goldman, Sachs & Co. priced $318.2 million of Nassau Country Interim Finance Authority sales tax secured bonds, rated AAA by Standard & Poor's and Fitch Ratings.
Yields in preliminary pricing for the first series, $142.2 million of tax-exempt bonds, ranged from 0.49% with 3% and 4% coupons in a split 2015 maturity to 2.18% with a 5% coupon in 2025. The bonds are callable at par in 2022.
Price guidance was released on the second series, $176 million of taxable bonds, with maturities between 2014 and 2023. Spreads ranged from 45 basis points to 120 basis points above the comparable Treasury yields.
Goldman is also expected to price Nassau County Local Economic Assistance Corp. revenue bonds for the Winthrop-University Hospital Association Project, rated Baa1 by Moody's Investors Service and BBB-plus by Fitch.
On Tuesday, the 10-year Municipal Market Data yield and the 30-year yield fell one basis point each to 1.69% and 2.84%, respectively. The two-year closed flat for the sixth session at 0.30%.
Treasuries were weaker Wednesday morning. The benchmark 10-year yield rose two basis points to 1.64% while the 30-year yield increased three basis points to 2.84%. The two-year was steady at 0.24%.