Strength in the muni market moved to the belly of the curve Thursday afternoon as traders said high-grade 10-year bonds were trading through 2.00% in the secondary.

"The market feels stronger," a trader located in the Southwest region said. "We are seeing larger trades especially in high-grade. But it's starting to trickle down to smaller deals."

He added the market felt two to five basis points stronger in the belly of the curve. "The 10-year has been down so low for so long and those bonds are starting to trade well through 2.00% on triple-A bonds."

This trader noted an $80 million Frisco, Texas, deal rated Aa1 by Moody's and AA by Standard & Poor's came in at 2.02%. "It's is starting to tighten up."

In the primary market Thursday, JPMorgan priced $500 million of Illinois State Toll Highway Authority senior revenue bonds, rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.

Yields ranged from 2.86% with a 5% coupon in 2027 to 3.53% with a 5% coupon in 2038. The bonds are callable at par in 2023.

Loop Capital Markets is expected to price $417 million of San Diego Unified School District general obligation ad valorem property tax bonds, rated Aa3 by Moody's and AA-minus by Standard & Poor's.

RBC Capital Markets priced $372.4 million of Dallas-Fort Worth International Airport joint revenue improvement bonds subject to the alternative minimum tax, rated A1 by Moody's and A-plus by Standard & Poor's, and A by Fitch.

Yields ranged from 3.36% with a 5% coupon in 2026 to 4.26% with a 5% coupon in 2045. The bonds are callable at par in 2022 except bonds maturing in 2038, 2043, and 2045 which are callable at par in 2020.

The Sacramento Municipal Utility District issued $308.8 million of electric revenue bonds in three pricings, rated A1 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch.

Barclays priced $132.4 million. The bonds yielded 3.35% with a 5% coupon in 2037, 3.85% with a 3.75% coupon in 2038, and 3.43% with a 5% coupon in 2041. The bonds are callable at par in 2023.

Bank of America Merrill Lynch priced $118.6 million. Yields ranged from 0.77% with a 5% coupon in 2017 to 3.19% with a 5% coupon in 2033. The bonds are callable at par in 2023.

B of A Merrill also priced $57.8 million. Yields ranged from 0.47% with a 5% coupon in 204 to 0.92% with a 5% coupon in 2017.

Municipal bond scales ended a few basis points firmer Wednesday after a mixed session Tuesday. The muni market also posted gains Monday.

Yields on the Municipal Market Data triple-A GO scale ended as much as four basis points lower. The 10-year yield dropped two basis points to 1.70% and the 30-year yield fell three basis points to 2.90%. The two-year closed steady at 0.29% for the ninth session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended as much as three basis points lower. The 10-year yield fell one basis point to 1.77% and the 30-year yield slid two basis points to 3.03%. The two-year was flat at 0.32% for the ninth session.

Treasuries were stronger. The benchmark 10-year and 30-year yields slid one basis point each to 1.70% and 2.88%, respectively. The two-year was steady at 0.23%.

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