NEW YORK – Deals in the primary market were priced to go traders said, with the secondary markets stalling as markets await a final outcome on the EU Summit.
“The market is being pushed by a couple of players,” said a trader in Minnesota. “The rest of the street is ignoring what is going on.”
In the negotiated primary market, “deals are priced to go” based on the forward supply that’s coming, the trader added. “The negotiated product is the cheapest in the market now.”
In the secondary market, “trading is weaker today than it was yesterday,” the trader said.
On Tuesday, the two-year muni yield closed at 0.45% for its ninth consecutive trading session. The 10-year saw a one basis point drop to 2.42%, and the 30-year yield finished at 3.72%.
In Wednesday afternoon trading, the Treasury market continued its sell-off, with yields increasing three to five basis points across the curve. The benchmark 10-year Treasury saw the biggest sell off, increasing five basis points to 2.17%. The two-year was up three basis points at 0.29%, and the 30-year was up four basis points to 3.17%.
In the negotiated market Wednesday, Wells Fargo priced $480.2 million of Chicago Transit Authority sales tax receipts revenue bonds. The bonds are rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s.
Yields ranged from 3.78% with a 5% coupon in 2021 to 4.98% with a 5.25% coupon in 2040. Credits are callable at par in 2021.
JP Morgan priced for retail $481.2 million of Catholic Healthcare West bonds in two series. The bonds are rated A2 by Moody’s, A by Standard & Poor’s and A-plus by Fitch Ratings.
Yields on the $353.9 million 2011 Series A California Health Facilities Financing Authority revenue bonds, ranged from 1.45% with a 3% coupon in 2013 to 4.89% with a 4.75% coupon in 2028. Credits maturing between 2023 and 2027, and 2041, were not available to retail. The bonds are callable at par in 2021.
Yields on the second series, $127.3 million 2011 Series B Arizona Health Facilities Authority revenue bonds, were 5.40% with a 5.375% coupon in 2041. The bonds are callable at par in 2021.
JP Morgan won $400 million Port Authority of New York and New Jersey revenue bonds in competitive bidding. Pricing was not available by press time.
MMD analyst Randy Smolik noted concessions were taken on large negotiated deals, as the market awaited a final report from the EU Summit meeting. But the competitive market saw firmer yields.
