Muni bond yields cut 2 bps to 4 bps; market ‘sluggish’; Massachusetts details $700 million sale

By Cristal Cody

Tupelo, Miss., Oct. 23 – Municipal bonds continued to trade lower on Thursday, along with Treasuries, on heavy primary supply, market sources said.

“Treasuries are off,” a trader said. “Munis got cut anywhere from 2 to 4 basis points, even though it seemed heavier than that.”

Treasuries ended lower for a third straight session, according to market sources.

The 10-year Treasury note yield rose 5 bps to 2.28%, and the 30-year bond yield eased 4 bps to 3.04%.

The market is “sluggish” on the back of $7.3 billion of issuance over the week, a source said.

“We’re trying to find some balance on the new issues that came out today,” the source said. “A lot of the new deals are getting stowed to try to drag up some business.”

The week ahead is projected to see about $5.9 billion of new muni bond issuance, according to a market insider.

Massachusetts prices, trades

In the primary market, Massachusetts brought $700 million of general obligation consolidated loan of 2014 bonds, according to a pricing sheet.

The commonwealth sold $500 million of series F bonds with serial maturities from 2023 through 2031 and coupons from 3% to 5% and $200 million of series G bonds due 2015 through 2019 with coupons from 0.25% to 1.85%.

The bonds priced competitively.

Public Resources Advisory Group was the financial advisor.

In the secondary market, the tranche of 5% bonds due 2025 traded at 120.694 to yield 2.17%, a source said. The issue priced in a $50 million offering at 120.449 to yield 2.2%.

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