The primary's volume fell off on Thursday after a particularly active Tuesday and Wednesday pricing the $2 billion New York City deal and the $2 billion State of California deal, but what was lost in issuance activity was made up in the secondary markets. The market continued strengthening as traders digested the compressed spreads and high subscription rates.
Of the handful of small, regional deals to price was the taxable Village Center Community Development District's $172 million recreational revenue refunding deal, according to data provided by Ipreo. Priced by Citigroup Global in the negotiated markets, the issuance was priced at par with coupon ranging from 1.303% in 2015 through 5.015% in 2036, according to Ipreo.
The deal is rated single-A by Standard & Poor's.
Pasco County, Florida also tapped the negotiated markets with a two part $104.91 million water and sewer refunding revenue deal, according to Ipreo. The $54.29 million Series 2014A bonds were priced to yield a range of 0.39% on a 5% coupon in 2016 through 3.27% on a 5% coupon in 2036, according to Ipreo. The $50.62 million Series 2014B bonds were priced to yield 3.48% on a 5% coupon in 2044 and 3.83% on a 4% coupon in 2044.
Both tranches were rated Aa2 by Moody's Investor Services, AA-plus by S&P, and double-A by Fitch Ratings.
Notably in the secondary market, New York City's Sales Tax Asset Receivable Corporation became free to trade at 9am Thursday morning and picked up heavy interest driving yields down even further than originally priced. The most actively traded security, the 5s of 2026, picked up $57 million in trades, pushing yields down to 2.40% in round lot trading, 12 basis points down from the initial offering price of 2.52%, according to data provided by Municipal Securities Rulemaking Board's disclosure website EMMA.
The municipal market held its strength and continued tightening in the long end of the curve by midday Thursday, according to data provided by TM3. Yields on bonds maturing between 2015 through 2021 held steady as yields bond maturing in 2022 fell up to one basis point as bond maturing between 2023 through 2044 strengthened up to two basis points, according to the Municipal Market Data's triple-A 5% curve provided by TM3.
Treasuries continued strengthening through Thursday morning trading sessions. Yields on the two-year fell two basis point to 0.58% from Wednesday's close, while the 10- and 30-year each dropped six basis points to 2.51% and 3.22%, respectively.
