Buyers began to emerge in the tax-exempt market Tuesday afternoon as the selloff stabilized and the rise in yields slowed to single digits.
"It's a little better but it's been a long tough march," an Atlanta trader said. "There is buying interest and people are looking at offerings but there is still a heavy tone. There are still sellers, no question."
Buyers emerged on the long-end as 5% coupon bonds traded at a discount. "The long 5s at a discount are trading but it seems like things are also getting a look in the 10-year range now."
Tuesday, Citi priced for institutions $403.4 million of New York State Environmental Facilities Corp. state clean water and drinking water revolving funds for New York City Municipal Water Finance Authority projects. The bonds are rated Aaa by Moody's Investors Service, AAA by Standard & Poor's, and AA-plus by Fitch Ratings.
Yields ranged from 0.75% with 3% and 5% coupons in a split 2015 maturity to 4.46% with a 4.375% coupon and 4.35% with a 5% coupon in a split 2033 maturity. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.
Yields were raised as much as 15 basis points from retail pricing. Spreads on 5% coupon bonds in institutional pricing Tuesday were 20 basis points to 53 basis points above the Municipal Market Data scale on Monday.
Monday, yields on the Municipal Market Data scale ended as much as 20 basis points higher. The 10-year and 30-year yields jumped 17 basis points each to 2.80% and 4.13%, respectively. The two-year yield increased 12 basis points to 0.55%.
Yields on the Municipal Market Advisors 5% scale closed as much as 19 basis points higher Monday. The 10-year jumped 18 basis points to 2.96% and the 30-year yield spiked 15 basis points to 4.23%. The two-year yield jumped eight basis points to 0.58%.
After posting small gains Tuesday morning, Treasury yields headed higher in the afternoon. The benchmark 10-year yield rose three basis points to 2.60% and the 30-year yield jumped four basis points to 3.61%. The two-year yield increased one basis point to 0.41%.
