The municipal market was slightly weaker yesterday. Traders said tax-exempt yields were higher by one or two basis points.
"There was a bit more activity than there was yesterday or last week for that matter, but it was still fairly quiet," a trader in Los Angeles said. "There's still a bit of weakness out there, and we kind of picked up where we left off yesterday. Not much, though. Maybe a basis point, two at most."
The Treasury market, however, showed some small gains. The yield on the benchmark 10-year Treasury note, which opened at 2.73%, finished at 2.68%. The yield on the two-year note was quoted near the end of the session at 0.90% after opening at the same level. The yield on the 30-year bond, which opened at 3.21%, was quoted near the end of the session at 3.19%.
In the new-issue market yesterday, RBC Capital Markets priced $407.3 million of unlimited-tax school building bonds for the Dallas Independent School District. The bonds mature from 2015 through 2034, with yields ranging from 3.55% with a 5.25% coupon in 2015 to 5.62% with a 5.5% coupon in 2034. The bonds, which are callable at par in 2018, are backed by Texas' triple-A Permanent School Fund. The underlying credit is rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings.
Siebert Brandford Shank & Co. priced $163.1 million of bonds for San Antonio in two series. Bonds from a $77 million series of general improvement bonds mature from 2011 through 2028, with yields ranging from 2.55% with a 4% coupon in 2011 to 5.50% with a 5.25% coupon in 2028. Bonds from an $86.1 million series of combination tax and revenue certificates of obligation mature from 2009 through 2028, with yields ranging from 1.10% with a 4% coupon in 2009 to 5.50% with a 5.25% coupon in 2028. All bonds are callable at par in 2018. The credit is rated Aa1 by Moody's, AAA by Standard & Poor's, and AA-plus by Fitch.
Morgan Stanley priced $107.8 million of tax-exempt and taxable bonds for Rhode Island following a tremendous retail order period in which retail investors gobbled up $102 million, or 95% of the sale.
Bonds from the $86.9 million tax-exempt Series B mature from 2010 through 2024, with a term bond in 2028. Yields range from 2.23% with a 4% coupon in 2010 to 5.62% with a 5.5% coupon in 2028. Bonds from the $12.4 million tax-exempt Series D mature from 2011 through 2018, with yields ranging from 2.62% with a 4% coupon in 2011 to 4.42% with a 5.25% coupon in 2018.
Bonds from series B are callable at par in 2018, while bonds from Series D are not callable. The deal also contains an $8.5 million taxable Series C. The credit is rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.
New York City announced that it will sell $300 million of general obligation bonds next Tuesday, subject to market conditions. There will be a two-day retail order period on the bonds, which begins Friday. JPMorgan will price the bonds for the city, whose credit is rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.
The economic calendar was light yesterday.
