The municipal market was quiet and somewhat mixed yesterday, amid fairly light trading activity.“We’re pretty quiet, but you can pick up a basis point here and there,” a trader in New York said. “The gains are spotty. We’re probably relatively unchanged on the whole, but maybe one or two firmer on the long end, and a basis point better here and there elsewhere.”
“We’re virtually flat overall, but there was a bit of movement in either direction,” a trader in Los Angeles said. “We were a bit firmer out long, and as the day dragged on, I think we even saw some losses, mild ones, on the short end. I’m talking like a basis point or so, in spots. Overall though, not much activity, and pretty much flat at the end of the day.”
The Treasury market showed gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.71%, was quoted near the end of the session at 3.60%. The yield on the two-year note was quoted near the end of the session at 1.10%, after opening at 1.15%. And the yield on the 30-year bond, which opened at 4.54%, was quoted near the end of the session at 4.43%.
As of Wednesday’s close, the triple-A muni scale in 10 years was at 79.9% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 102.4% of comparable Treasuries. Also, as of Wednesday’s close, 30-year tax-exempt triple-A rated general obligation bonds were at 105.9% of the comparable London Interbank Offered Rate.
In the new-issue market yesterday, Morgan Stanley priced $421.1 million of revenue bonds for the California Health Facilities Financing Authority in four series.
Bonds from the $185.1 million Series A mature in 2029 and 2039, yielding 5.62% with a 5.5% coupon and 5.87% with a 5.75% coupon, respectively. These bonds are callable at par in 2019.
Bonds from the $69.3 million Series B mature in 2010 and from 2012 through 2018, with a term bond in 2021. Yields range from 2.63% with a 4% coupon in 2012 to 5.06% with a 5.25% coupon in 2021. Bonds maturing in 2010 were not formally re-offered. These bonds are callable at par in 2019.
Bonds from the $110.5 million Series C mature in 2034, yielding 3.97% with a 5% coupon. These bonds are not callable.
Bonds from the $56.2 million Series D mature in 2034, yielding 4.50% with a 5% coupon in 2034. These bonds are not callable.
The credit is rated A1 by Moody’s Investors Service and AA-minus by both Standard & Poor’s and Fitch Ratings.
Merrill Lynch & Co. priced $222.1 million of health care refunding revenue bonds for North Carolina’s Charlotte-Mecklenburg Hospital Authority. The bonds mature from 2010 through 2029, with term bonds in 2034 and 2039. Yields range from 0.80% with a 2% coupon in 2010 to 5.49% with a 5.25% coupon in 2039. The bonds are callable at par in 2019, except a portion of bonds maturing in 2034, which are callable at par in 2014. The credit is rated Aa3 by Moody’s and AA-minus by Standard & Poor’s.
JPMorgan priced $200 million of school facilities construction bonds for the New Jersey Economic Development Authority. The bonds mature from 2011 through 2030, with a term bond in 2034. Yields range from 1.45% with a 3% coupon in 2011 to 5.25% with a 5% coupon in 2034. The bonds, which are callable at par in 2019, are rated A1 by Moody’s, AA-minus by Standard & Poor’s, and A-plus by Fitch.
JPMorgan also priced $116.3 million of pollution control revenue refunding bonds for Wyoming’s Sweetwater County. The bonds mature in 2026, yielding 5.30%, priced at par. The bonds, which are callable at par in 2019, are rated A3 by Moody’s and A-minus by Standard & Poor’s.
Estrada Hinojosa & Co. priced $98.8 million of bonds for Bexar County, Tex. The bonds mature from 2016 through 2033, with a term bond in 2035. Yields range from 2.69% with a 3% coupon in 2016 to 5.01% with a 5% coupon in 2035. The bonds, which are callable at par in 2019, are rated Aa1 by Moody’s and AA-plus by both Standard & Poor’s and Fitch.
In economic data released yesterday, initial jobless claims for the week ended Aug. 8 came in at 558,000, after a revised 554,000 the previous week. Economists polled by Thomson Reuters had predicted 545,000 initial claims.
Continuing jobless claims for the week ended Aug. 1 came in at 6.202 million, after a revised 6.343 million the previous week. Economists polled by Thomson Reuters had predicted 6.300 million continuing claims.
Retail sales fell 0.1% in July, after a revised 0.8% rise the previous month. Economists polled by Thomson Reuters had predicted a 0.7% gain.
Excluding autos, retail sales fell 0.6% in July, after a revised 0.5% uptick the previous month. Economists polled by Thomson Reuters had predicted a 0.1% climb.
Import prices fell 0.7% in July, after a revised 2.6% gain the previous month. Economists polled by Thomson Reuters had predicted a 0.4% fall.
Business inventories dropped 1.1% in June, after a revised 1.2% decline the previous month. Economists polled by Thomson Reuters had predicted a 0.9% decrease.
