The municipal market was unchanged yesterday.
"We're fairly sideways," a trader in New York. "We're seeing some trading here and there, but we're definitely unchanged. No bias right now, positive or negative."
The Treasury market showed some gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.55%, was recently quoted at 3.51%. The yield on the two-year note was quoted recently at 1.78% after opening at 1.81%.
"I didn't see a whole lot of movement here, one way or the other," a trader in San Francisco said. "Treasuries are having a decent day, but it didn't carry over into munis at all. I have us flat."
In economic data released yesterday, the consumer confidence index plunged in March, dropping to 64.5 from an upwardly revised 76.4 last month. The February index reading was originally reported as 75.0. Economists polled by IFR Markets predicted the index would slip to 73.0.
In the new-issue market yesterday, JPMorgan priced $600 million of federal highway revenue bonds in two series for the Georgia State Road & Tollway Authority. Bonds from the larger series, worth $480 million of grant anticipation bonds, mature from 2009 through 2020, with yields ranging from 2.25% with a 5% coupon in 2009 to 4.26% with a 5% coupon in 2020. Bonds maturing in 2013, 2018, 2019, and 2020 are insured by Financial Security Assurance Inc.
Bonds from the smaller $120 million series of reimbursement bonds mature from 2009 through 2020, with yields ranging from 2.25% with a 3.5% coupon in 2009 to 4.26% with a 5% coupon in 2020. Bonds maturing from 2013 through 2020 are insured by FSA. All bonds are callable at par in 2018. The underlying credit is rated Aa3 by Moody's Investors Service, and AA-minus by Standard & Poor's and Fitch Ratings.
Among uninsured 5% coupon paper in the deal, bonds maturing from 2012 through 2017 were tightest to Monday's Municipal Market Data triple-A yield curve, with yields 34 basis points over the curve. Bonds maturing in 2009 were widest to the scale, with yields 48 basis points over.
The authority last sold grant anticipation revenue bonds in July 2006. Citi priced that $360 million deal, which matures from 2007 through 2018. Yields range from 3.74% with a 5% coupon in 2008 to 4.23% with a 5% coupon in 2018. Bonds maturing in 2007 were decided via sealed bid. Bonds maturing from 2010 through 2018 are insured by MBIA.
Among 5% coupon paper in the deal, bonds maturing in 2008 were tightest to that day's MMD triple-A yield curve, with yields seven basis points over the curve. Bonds maturing in 2012 and 2013 were widest to the scale, with yields 14 basis points over.
Goldman, Sachs & Co. priced $393.2 million of electric revenue refunding bonds for Washington's Energy Northwest in four series. Bonds from the largest series, worth $231 million, mature from 2013 through 2016, with yields ranging from 3.34% with a 5% coupon in 2013 to 4.04% with a 5% coupon in 2017. Bonds from the next largest series, $110.9 million, mature from 2014 through 2018, with yields ranging from 3.53% with a 5% coupon in 2014 to 4.19% with a 5.25% coupon in 2018.
Bonds from the $37.4 million series mature from 2021 through 2024, with yields ranging from 4.52% with a 5% coupon in 2021 to 4.86% with a 5% coupon in 2024. And bonds from the $14 million series mature in 2018, yielding 4.19% with a 5.25% coupon. Bonds from the $37.4 million series are callable at par in 2018. Bonds from all other series are not callable. The credit is rated Aaa by Moody's, and AA-minus by Standard & Poor's and Fitch.
At repricing, the deal was significantly altered. When the deal was tentatively priced yesterday, the total amount was $655.7 million. Each of the series was decreased in size. The largest series, now worth $231 million, was chopped from $302.5. The 2010, 2011, and 2012 maturities were eliminated, and the yields were raised by four to seven basis points. The $110.9 million series was originally worth $237.6 million. The 2010, 2011, and 2012 maturities in this series were eliminated, and yields were raised by three to seven basis points.
The $37.4 million series did not have its amount altered. However, yields were raised by two to six basis points at repricing. And the $14 million series was lowered from $78.3 million, as its 2010, 2011, and 2017 maturities were chopped. Those yields were raised by three basis points at repricing.
Among 5% coupon paper in the deal, bonds maturing in 2021, 2022, and 2024 were tightest to Monday's MMD triple-A curve, with yields 39 basis points over the curve. Bonds maturing in 2013, 2014, and 2015 were widest to the scale, with yields 50 basis points over.
Energy Northwest last sold electric revenue debt in March 2007. Goldman Sachs also priced that $280.1 million deal, in two series. Bonds from the larger $219 million series mature from 2013 through 2017, with yields ranging from 3.74% in 2013 through 3.88% in 2017, all with 5% coupons. Bonds from the smaller $61.1 million series mature from 2012 through 2018, with yields ranging from 3.71% in 2012 to 3.93% in 2018, all with 5% coupons.
Among 5% coupon paper in the deal, bonds maturing in 2012 were tightest to that day's MMD triple-A yield curve, with yields 18 basis points over the curve. Bonds maturing in 2015 were widest to the scale, with yields 20 basis points over.
In other activity, Morgan Stanley priced $127.4 million of gas utility distribution system second lien multi-mode revenue refunding bonds for Indianapolis in two series. Bonds from the $56.1 million series A mature in 2030, yielding 4.25% with a 5% coupon. Bonds from the $71.4 million series B mature from 2025 through 2027, yielding 5.06%, 5.14%, and 5.20%, respectively, all with 5.25% coupons. Series A bonds are not callable prior to their mandatory tender date in 2013. Series B bonds are callable at par in 2018. The underlying credit is rated A2 by Moody's and A-plus by Standard & Poor's.
