The municipal market was closed in observance of Veterans Day yesterday, providing a brief pause after a four-week period in which yield levels have risen.
Over the past month, yields in the tax-exempt market have risen pretty steadily across the triple-A yield curve, according to Municipal Market Data.
From the close of business Oct. 9 through the close of business Tuesday, yields from two years on through the remainder of the curve had increased. One-year yields have remained steady at 0.37%.
The MMD triple-A scale yielded 3.00% in 10 years and 3.83% in 20 years Tuesday, after levels of 2.81% and 3.59%, respectively, on Oct. 9. The scale yielded 4.26% on Tuesday after Oct. 9’s levels of 3.98%.
Most of the week’s new issuance has already been priced, particularly Tuesday’s sales of $1.9 billion of debt from the California Statewide Communities Development Authority by Goldman, Sachs & Co., and $600 million of Connecticut general obligation notes by Citi. However, some deals remain to be priced today.
In the new-issue market today, Bank of America Merrill Lynch will price $143 million of bonds for the New Hampshire Health and Education Facilities Authority on behalf of LGR Health. The bonds are rated Aa2 by Moody’s Investors Service and AA by Standard & Poor’s.
Bank of America Merrill will also price $125 million of bonds for the New York State Higher Education Finance Authority.
RBC Capital Markets will price $88.9 million of bonds for California’s Richmond Joint Powers Financing Authority.
The bonds are slated to mature from 2010 through 2024, with term bonds in 2030 and 2037. The bonds are rated A by Standard & Poor’s.
JPMorgan will price $65 million of debt for Michigan’s DTE Energy Co. These bonds are rated A2 by Moody’s, A-minus by Standard & Poor’s, and A-minus by Fitch Ratings.
Additionally, Ziegler Capital Markets will price $65 million of development revenue bonds for Wisconsin’s Monroe Redevelopment Authority. The bonds are rated A3 by Moody’s and A-minus by Fitch.
In a weekly report, Bank of America Merrill Lynch global research analyst Philip Fischer, wrote: “With the [Federal Reserve] clearly signaling that the fed funds rate is on hold for the foreseeable future, and the Treasury announcing a huge refunding, the backdrop for munis continues to be low short term rates and pressure on the long end.”
“That likely places the market in stasis until the holidays,” Fischer wrote.
