The municipal market set its seventh consecutive daily record Wednesday as 10-year yields tumbled to yet another all-time low and 30-year munis matched their previous record. The streak began Aug. 10.
Traders said tax-exempt yields were about two or three basis points lower Wednesday amid light to moderate secondary trading activity.
"It's just a really firm market right now," a trader in Los Angeles said. "There must be a firm tone if we're hitting record lows almost daily in the 10-year sector."
He said trading was light Wednesday
"Until there's a real infusion of supply in here or there's some data that comes along to change things, there's no reason why this won't continue for the next little while," the trader said.
The Municipal Market Data triple-A scale yielded a record-low 2.32% in 10 years and 3.44% in 20 years Wednesday, following levels of 2.36% and 3.47% on Tuesday.
The scale yielded 3.81% in 30 years Wednesday, following 3.83% Tuesday.
Wednesday marked the first time during this rally that 30-year munis reached their record low. Wednesday's 3.81% level matches the low set on Oct. 2, 2009.
On top of that, 20-year tax-exempts are on the verge of making history. Wednesday's level of 3.44% is just one basis point higher than the all-time low of 3.43%, also set on Oct. 2, 2009.
"We're a couple ticks better," a trader in New York said. "More of the same. Decent activity, but we're definitely still feeling firmer."
Wednesday's triple-A muni scale in 10 years was at 87.9% of comparable Treasuries and 30-year munis were at 102.1%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 113.1% of the comparable London Interbank Offered Rate.
The Treasury market was mixed Wednesday. The benchmark 10-year note finished at 2.65% after opening at 2.63%. The 30-year bond was quoted near the end of the session at 3.74% after opening at 3.77%.
The two-year note finished at 0.51% after also opening at 0.51%.
In the new-issue market Tuesday, Massachusetts competitively sold $1.7 billion of debt over five series.
The $425 million Series B GO revenue anticipation notes were sold to various bidders.
JPMorgan won the largest total amount, $325 million, plus the largest individual piece, worth $200 million, with an effective rate of 0.23%. The $125 million chunk was won with an effective rate of 0.25%.
TD Securities won the two remaining pieces, worth $50 million each, with effective rates of 0.23% and 0.21%.
The $425 million Series C GO Rans were also sold to various bidders.
The largest chunk of the deal, worth $150 million, went to Wells Fargo Securities with an effective rate of 0.245%.
Goldman, Sachs & Co. and JPMorgan each won a $91.67 million piece, both with effective rates of 0.249%.
Morgan Keegan & Co. and RBC Capital Markets each won a $45.8 million component, both with effective rates of 0.249%.
A $358 million series of taxable Build America Bonds was sold to Citi with a true interest cost of 4.53%.
The BABs mature in 2031, yielding 4.50% priced at par, or 2.93% after the 35% federal subsidy.
The bonds were priced to yield 80 basis points over 30-year Treasuries.
A $350 million series of GO Rans was sold to Goldman with an effective rate of 0.23%.
Massachusetts also sold $150 million of GO Rans to Wells Fargo.
The Rans mature in June 2011 with a 2% coupon and were not formally re-offered.
Massachusetts' short-term credit is rated MIG-1 by Moody's Investors Service, SP-1-plus by Standard & Poor's, and F1-plus by Fitch Ratings.
The commonwealth's long-term debt is rated Aa1 by Moody's and AA by Standard & Poor's.
JPMorgan priced $467.6 million of taxable funding notes for the Kentucky Asset/Liability Commission.
The notes mature in 2011, 2012, and from 2018 through 2020. Yields range from 0.84% in 2011 to 4.20% in 2020, all priced at par.
They were priced to yield between 60 and 175 basis points over the comparable Treasury yields, and contain a make-whole call at Treasuries plus 25 basis points.
The credit is rated Aa2 by Moody's, A-plus by Standard & Poor's, and AA-minus by Fitch.
Also in the competitive market, Wisconsin sold $456.4 million of taxable and tax-exempt debt in two series.
Bonds from the $309.7 million series of taxable BABs mature were sold to Barclays Capital with a TIC of 4.64%.
The BABs mature from 2020 through 2026, with term bonds in 2032 and 2041. Yields range from 3.45% priced at par in 2020, or 2.24% after the 35% federal subsidy, to 5.11% with a 5.1% coupon in 2041, or 3.32% after the subsidy.
Bonds from the $146.7 million series of tax-exempt GO debt were sold to JPMorgan with a TIC of 1.72%.
The bonds mature from 2012 through 2019, with yields ranging from 0.43% with a 5% coupon in 2012 to 2.25% with a 4% coupon in 2019.
The bonds, which are not callable, are rated Aa2 by Moody's and AA by both Standard & Poor's and Fitch.
Goldman Sachs priced $394.3 million of second-lien revenue bonds for Louisiana.
The bonds mature from 2013 through 2040 with a term bond in 2045. Yields range from 0.60% with a 5% coupon in 2013 to 4.35% with a 5% coupon in 2045.
The bonds, which are callable at par in 2020, are rated Aa2 by Moody's and AA by Standard & Poor's.
The economic calendar was light Wednesday.