The municipal market stabilized amid limited trading heading into the holiday next week, traders said.
RBC Capital Markets managed to price a two-pronged $643.23 million revenue offering for Ohio's American Municipal Power Inc. in the primary market.
"It's a bit stronger on the back end, but very quiet with the lack of supply coming," a New York trader said Friday afternoon.
Overall, he said the market felt a little firmer after yesterday's selloff sent yields higher.
"When you get cuts at seven or eight basis points, people are beat up, so there's not much going on," the New York trader said. "The Street is not really paying attention to some of the buying opportunities out there."
Municipal bonds maturing from 2015 to 2035 were steady at midday, while the yields on maturities in 2036 to 2044 were lowered by between zero and one basis point.
Long Treasury yields headed into midday three basis points lower at 2.78%, after starting the day at 2.81%, while the 10-year Treasury yield firmed by one basis point to 2.18%% after it opened at 2.19%. The two-year weakened to 0.65% at midday after beginning the day at 0.63%, according to Bloomberg.
The Ohio deal was priced with serial bonds maturing from 2020 to 2033 with yields ranging from 1.72% with a 5% coupon to 3.30% with a 5.25% coupon, respectively.
Term bonds in 2039 and 2042 were priced with 5% coupons yielding 3.59% and 3.67%, while the 2043 was priced with a 4% coupon to yield 4.11%, according to the final pricing scale. The bonds are rated A1 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.
The long bonds were attractive against the backdrop of 30-year triple-A GOs which yielded 2.94% on Friday, according to Municipal Market Data.
The prospects for new issuance next week were dismal, however, with just $27.6 million of supply expected, as reported by Ipreo LLC and The Bond Buyer, following this week's $5.05 billion, according to Thomson Reuters.
