Amid light new issue supply, the tax-exempt market firmed for a second session as triple-A rated South Carolina auctioned bonds in the competitive market that came richer to Monday's benchmark scales.
"The deal came firm and rich, but there are no deals this week so it's not a surprise," a Chicago trader said. "And JPMorgan buys anything high-grade, especially a state general obligation bond."
JPMorgan bought the largest portion of the three-part $143.1 million South Carolina GOs.
Outside the new issue market, munis were "quietly firming," the trader said.
South Carolina auctioned $143.1 million of GOs in three pricings, rated triple-A by Moody's Investors Service and Fitch Ratings and AA-plus by Standard & Poor's.
JPMorgan won the bid for $85 million of GO state economic development bonds. Yields ranged from 0.17% with a 2% coupon in 2015 to 2.63% with a 5% coupon in 2023. Bonds with 5% coupons maturing between 2015 and 2023 were priced three basis points richer than Monday's Municipal Market Data scale.
Wells Fargo won the bid for $34.9 million. Pricing details weren't available by press time.
JPMorgan won the bid for $23.2 million of GO state highway refunding bonds. Yields ranged from 0.15% with a 2% coupon in 2014 to 2.12% with a 5% coupon in 2021. Bonds with 5% coupons maturing between 2016 and 2021 were priced 11 to 15 basis points richer than Monday's MMD scale.
On Monday, the triple-A Municipal Market Data scale ended as much as one basis point stronger after posting gains on Friday. The 30-year yield slid one basis point to 4.13%. The 10-year was steady for the third session at 2.66% and the two-year closed unchanged for the eighth session at 0.33%.
Yields on the Municipal Market Advisors benchmark scale ended steady to one basis point firmer. The two-year and 30-year yields fell one basis point each to 0.37% and 4.36%, respectively. The 10-year was steady at 2.72%.
Treasuries were stronger Tuesday afternoon. The benchmark 10-year and 30-year yields slid four basis points each to 2.70% and 3.79%, respectively. The two-year yield fell one basis point to 0.29%.