Munis Unmoved Amid Firmer Tone

The municipal market was largely unchanged yesterday, with a slightly firmer tone.

"There's not a ton of movement out there right now, but there is a bit of a firmer tone," a trader in New York said. "I'd still say we're pretty much unchanged, but we're feeling a touch firmer. Maybe we're a basis point or so better in spots, but it's fairly quiet."

"There's a bit of firmness here and there, but we're pretty much flat on the whole," a trader in Los Angeles said. "There's some decent activity in the secondary, but we're fairly unchanged."

The Treasury market showed gains yesterday. The yield on the benchmark 10-year note opened at 3.60% and was quoted near the end of the session at 3.48%. The yield on the two-year note opened at 0.83% and was quoted near the end of the session at 0.74%.

The yield on the 30-year bond was quoted near the end of the session at 4.41% after opening at 4.53%.

Yesterday's Municipal Market Data triple-A scale yielded 2.88% in 10 years and 3.62% in 20 years, matching Wednesday's levels of 2.90% and 3.64%. The scale yielded 4.10% in 30 years yesterday after Wednesday's level of 4.12%.

As of Wednesday's close, the triple-A muni scale in 10 years was at 80.8% of comparable Treasuries, 30-year munis were 90.9% of comparable Treasuries, and 30-year tax-exempt triple-A general obligation bonds were at 95.2% of the comparable London Interbank Offered Rate, according to MMD.

Bond volume Wednesday hit $400.02 billion for 2009, according to Thomson Reuters. December volume so far is at $26.84 billion, compared with $17.43 billion through Dec. 16, 2008.

In the new-issue market yesterday, JPMorgan priced $242.4 million of revenue bonds for the Maryland Health and Higher Educational Facilities Authority.

The bonds mature from 2010 through 2021, with term bonds in 2024, 2029, 2034, and 2039. Yields range from 1.70% with a 3% coupon in 2011 to 5.32% with a 5.125% coupon in 2039.

The bonds, which are callable at par in 2019, are rated A2 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.

RBC Capital Markets priced $150 million of bond anticipation notes for California's Long Beach Community College District.

The Bans, which are not callable, mature in 2013, yielding 2.75% with a 9.85% coupon, and are rated Aa3 by Moody's and AA-minus by Standard & Poor's.

JPMorgan also priced $118.7 million of utility system revenue refunding bonds for Florida's Orlando Utilities Commission.

The bonds mature from 2011 through 2017, with yields ranging from 1.06% with a 3% coupon in 2011 to 3.11% with a 5% coupon in 2017.

The bonds, which are not callable, are rated Aa1 by Moody's and AA by Standard & Poor's and Fitch.

Also, Cabrera Capital Markets Wednesday sold $375 million of Build Illinois Bonds.

The bonds have a final maturity of 2034 and were sold with an interest rate of 4.39%.

Trades reported by the Municipal Securities Rulemaking Board yesterday were mostly flat. A dealer sold to a customer taxable California Build America Bonds 7.3s of 2039 at 7.56%, even with where they traded Wednesday. A dealer sold to a customer Minnesota 5s of 2028 at 3.87%, even with where they were sold Wednesday.

A dealer sold to a customer Oregon Facilities Authority 5s of 2039 at 5.02%, down one basis point from where they were sold Wednesday.

A dealer sold to a customer insured New Jersey Transportation Trust Fund Authority 5.5s of 2021 at 4.09%, even with where they traded Wednesday.

A dealer sold to a customer Idaho's Boise State University 5s of 2034 at 4.50%, even with where they traded Wednesday. Bonds from an interdealer trade of Clark County, Nev., 4s of 2022 yielded 4.10%, even with where they were sold Wednesday.

In economic data released yesterday, initial jobless claims increased 7,000 to 480,000 on a seasonally adjusted basis for the week ending Dec. 12.

Continuing claims rose by 5,000 to 5.186 million for the week ending Dec. 5.

Economists expected 465,000 initial claims last week and 5.150 million continuing claims in the prior week, according the median estimate from Thomson Reuters.

The initial claims figure was revised lower for the week ending Dec. 5 to 473,000 from the 474,000 initially reported.

The continuing claims figure was revised to 5.181 million from 5.157 million.

The composite index of leading economic indicators gained 0.9% in November, its eighth straight gain.

LEI increased an unrevised 0.3% in October.

Economists polled by Thomson Reuters predicted LEI would be up 0.7% in the month.

The region's manufacturing sector expanded, as the general business conditions index increased to 20.4 in December from 16.7 in November, according to this month's Federal Reserve Bank of Philadelphia Report on Business.

Economists surveyed by Thomson Reuters had predicted a reading of 16.0 for the index.

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