Wake County, N.C.'s general obligation issue was priced tight to Municipal Market Data's triple-A scale, as the market expected of the high-quality deal.
Wake County, N.C., priced tight to Municipal Market Data's triple-A scale through its 10-year offering during its auction on Tuesday morning. After a call option in 2024, however, pricing on the end of the curve weakened.
Yields on the general obligation bonds ranged from 0.32% on 5% coupon in 2016 to 3.24% on a 3.50% coupon in 2034, according to data provided by Ipreo. Bank of America Merrill Lynch won the bid which was rated triple-A by all three major rating agencies: Moody's Investors Service, Fitch Ratings and Standard & Poor's.
"It's not exciting for us, but it's good for them," commented a New York- based trader.
The $345 million of proceeds will go toward public improvement projects, according to the deal's official statement.
Wake County's is one of a handful of high-quality, low-yield deals to hit the market this week. Following history, this back half of August promises to be light both from a primary and secondary perspective, with no relief in sight likely until after Labor Day, agreed traders.
Yet to price Tuesday is $158.3 million of negotiated District of Columbia income tax secured revenue refunding bonds brought by Siegert Brandford. Traders expected the deal's high quality to drive yields down similar to the North Carolina deal.
The bonds mature from 2014 to 2025 and the deal is rated Aa1 by Moody's and AA-plus by Fitch.
The municipal market opened steady, with no change in yields reported across the curve as of Tuesday morning, according to the MMD triple-A 5% scale. The 10-year benchmark opened at 2.368%, two basis points stronger than from Monday's close.
The Treasury market weakened slightly in trading on Tuesday morning, with the yields on the two-year and 10-year each rising one basis point to 0.43% and 2.40% respectively. The 30-year rose two basis points to 3.21%.
