Secondary activity has been light as traders scramble to bid on the handful of smaller regional deals in the primary Tuesday afternoon.
"This week there's only a handful of deals over $500 million, but a ton of smaller deals," said a Virginia based trader. "If we can get our arms around the credit or we already know it, we're willing to do a smaller deal because that's just all there is."
Attempting to play to regional appeal, the Economic Development Authority of Culpeper County priced its competitive deal aggressively, only to find unsold balances in the deal's intermediate maturities, said a New York based trader. Robert Baird won the bid for $51.415 million of lease revenue refunding bonds, with yields ranging from 0.3% on a 4% coupon in 2015, to 3.55% on a 3.5% coupon in 2032, according to data provided by Bloomberg.
Unsold balances occurred in the 2024, 2025 and 2026 year maturities, according to both traders.
The bonds maturing on and after 2025 are callable at par on June 1, 2024, according to data provided by TM3. The bonds are rated Aa3 by Moody's Investor Services, AA by Standard & Poor's, and AA minus by Fitch Ratings.
Both traders were confident the balance would sell within a couple of days, noting the softness of the Treasury market probably impacted pricing negatively.
Treasuries mostly weakened Tuesday, with the 10-year benchmark and the two-year note inching up one basis point each to 2.50% and 0.49%, respectively. The 30-year yield was unchanged at 3.30% from Monday's market close.
Bank of America Merrill won the bid for Portland, Ore.'s $ 195.865 million Series B sewer system bonds with a TIC of 3.43%. Yields ranged from 0.20% on a 5% coupon in 2015 up to 3.74% on a 4% coupon in 2039, according to data provided by Ipreo. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's, according to data provided by TM3.
No details are available on the smaller Series A part of the deal. The $92.165 million first lien sewer system revenue refunding bonds are rated slightly higher, with Moody's giving the tranche a Aa2 while S&P awarding it a double-A. Maturities are on the short to intermediate end ranging from 2015 to 2024, according to TM3.
The only other sizable deal to hit the competitive market Tuesday is $85.38 million Minnesota certificates of participation, which appears to have been won by Wells Fargo with a TIC of 3.697%. It matures from 2016 to 2039, according to TM3. The deal is rated AA by Standard & Poor's and Fitch Ratings. No details were available.
Rhode Island's Tobacco Settlement Financing Corporation deal is still in limbo after being placed on day to day status by its lead manager Citigroup Monday.
The deal also has a law suit filed against it from two Oppenheimer Rochester funds. At $593 million the tobacco deal is largest on this week's competitive calendar.
Maria Bonello contributed to this article.
