The tax-exempt market opened Wednesday morning with yields trading steady as the majority of the week's largest deals already priced and traders looked to the secondary market.
The Treasury yield curve steepened, though traders said munis stabilized after weakening earlier in the week. "There are lots of bids wanted. It's either redemptions or paying for new deals," a New York trader said. "The market feels stable though."
One remaining large deal on the negotiated calendar was set to price Wednesday. Citi is expected to sell to institutions $287.6 million of Massachusetts federal highway grant anticipation notes for the accelerated bridge program, following a two-day retail order period. The bonds are rated Aa1 by Moody's Investors Service, AAA by Standard & Poor's, and AA-plus by Fitch.
In the second retail pricing Tuesday, yields ranged from 0.49% with 3% and 4% coupons in a split 2016 maturity to 3.47% with a 4% coupon and 3.27% with 5% coupon in a split 2027 maturity. The bonds are callable at par in 2022. Yields were lowered as much as three basis points on bonds maturing inside 2019.
In the competitive market, Kentucky's Louisville-Jefferson County Sewer District will auction $226.3 million of short term notes, rated MIG-1 by Moody's and SP-1-plus by Standard & Poor's. The district will also issue $100 million of bonds in the long-term market, rated Aa3 by Moody's and AA by Standard & Poor's.
On Tuesday, the triple-A Municipal Market Data scale ended as much as five basis points weaker. The 10-year and 30-year yields rose five basis points each to 2.51% and 4.11%, respectively. The two-year was steady for the sixth session at 0.34%.
Yields on the Municipal Market Advisors benchmark scale ended as much as five basis points weaker. The 10-year yield rose three basis points to 2.65% and the 30-year yield increased five basis points to 4.30%. The two-year was flat for the fifth session at 0.48%.
The Treasury yield curve steepened. The benchmark 10-year yield slid two basis points to 2.65% and the 30-year yield rose two basis points to 3.78%. The two-year was steady at 0.31%.