The success behind Tuesday's major primary deals - the state of California and New York City - will trickle into the market on Wednesday, helping the handful of deals slated to price. Traders expected issuers to pick up compressed yields as scales tightened by Tuesday's market close. Below, the key events of the day.
Primary
- Bank of America Merrill Lynch will price a taxable $500 million Texas Public Finance Authority bond for negotiated sale on Wednesday. Designated as Texas Windstorm Insurance Association premium revenue bonds, trader expect the demand to be mixed, as the state is an infrequent issuer, but low tax, so the retail demand would be muted compared to that of California or New York. The bonds are unrated. Traders also anticipated that Tuesday's strength will help this deal, capturing compressed spreads and popularity.
- No bonds over $100 were scheduled to price in the competitive markets.
Secondary
- New York City credits continued to be top traders on Tuesday morning. The Triborough Bridge and Tunnel Authority had captured over $50 million of trades in the secondary markets as of 9:52 a.m., while the New York City Municipal Water Authority saw around $19 million of bonds traded. The credits were picking up activity thanks to Tuesday's marquee $2 billion New York City Sales Tax Asset Revenue bond deal. Traders said portfolios were selling out of other New York City positions in order to make room for the highly anticipated deal.
Scales
After yesterday's strength the Municipal Market Data's triple-A 5% curve held steady on Wednesday morning.
Treasuries
The U.S. Treasury curve held mostly steady on Wednesday morning in the intermediate to long end after strengthening on Tuesday. The two-year contracted two-basis points to 0.59% compared to Tuesday's market close, while the 10- and 30-year held steady at 2.54% and 3.25% respectively.
