Several of the week's largest deals were set to price Wednesday, leaving the secondary market weaker for a third session as traders eyed cheap deals in the primary.
"The primary is building right now and most of your bang for your buck is in the primary because most of these deals look cheap," a New Jersey trader said. "Dealers don't want to stock up on a lot of product right now."
In the secondary, this trader said prices are lower. "It's a trade by appointment day. The stock bids are not out here. Maybe it's apathy and guy are sitting on their hands waiting for the new deals to come."
In the primary market, several of the week's new issues are set to price. RBC Capital Markets is expected to price for retail $625 million of California State Public Works Board lease revenue bonds, rated A2 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch Ratings. Institutional pricing is expected Thursday.
M.R. Beal is expected to price for institutions $375 million of New York City Municipal Water Finance Authority water and sewer system second general resolution bonds, rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
In retail pricing Tuesday, the bonds yielded 4.78% with a 4.625% coupon and 4.67% with a 5% coupon in a split 2046 maturity. A portion of the bonds maturing in 2046 were not offered for retail. The bonds are callable at par in 2023. The New Jersey trader said the water bonds looked expensive Wednesday morning.
Morgan Stanley is expected to price for retail $298.4 million of New Jersey Building Authority revenue bonds. Institutional pricing is expected Thursday.
Bank of America Merrill Lynch is expected to price for institutions $277.7 million of Virginia Transportation Board federal transportation grant anticipation revenue notes, rated Aa1 by Moody's and AA by Standard & Poor's.
In retail pricing Tuesday, yields ranged from 0.26% with a 5% coupon and 0.41% with a 5% coupon in a split 2015 maturity to 4% priced at par in 2028. Bonds maturing in 2014 were offered via sealed bid and portions of bonds maturing between 2025 and 2028 were not offered for retail. The bonds are callable at par in 2023.
On Tuesday, the triple-A Municipal Market Data scale ended as much as four nine basis points weaker after nearly 10 basis point jump in yields on Friday. The 10-year yield rose four basis points to 2.62% and the 30-year yield rose one basis point to 4.16%. The two-year was steady for the 10th session at 0.34%.
Yields on the Municipal Market Advisors benchmark scale rose as much as five basis points Tuesday after an eight basis point increase Friday. The 10-year yield rose five basis points to 2.77% and the 30-year yield rose two basis points to 4.38%. The two-year yield fell one basis point to 0.48%.
Treasuries were stronger Wednesday after two consecutive weaker sessions. The benchmark 10-year yield slid four basis points to 2.74% and the 30-year yield fell two basis points to 3.84%. The two-year yield fell one basis point to 0.33%.
