The municipal market was unchanged yesterday, amid light secondary trading, as the end of the year drew closer.
“We’re just flat,” a trader in New York said. “There isn’t a whole lot to really speak of. It’s quiet, there’s not a lot trading, and we’re just pretty unchanged.”
“It’s just really quiet out there,” a trader in Los Angeles said. “It’s a holiday week, last week of the year, and there’s really not much of anything going on. We’re pretty flat.”
The Treasury market showed some gains yesterday. The yield on the benchmark 10-year note opened at 3.84% and was quoted near the end of the session at 3.81%. The yield on the two-year note opened at 1.10% and was quoted near the end of the session at 1.09%. The yield on the 30-year bond was quoted near the end of the session at 4.65%, after opening at 4.69%.
The Treasury Department auctioned $42 billion of five-year notes, with a 2 5/8% coupon, a 2.665% high yield, a price of 99.81. The bid-to-cover ratio was 2.59. The Federal Reserve banks bought $1.24 billion for their own account in exchange for maturing securities.
Yesterday’s Municipal Market Data triple-A scale yielded 2.98% in 10 years and 3.68% in 20 years, matching levels of 2.98% and 3.68%, respectively, Monday. The scale yielded 4.13% in 30 years yesterday, matching Monday’s level of 4.13%.
As of Monday’s close, the triple-A muni scale in 10 years was at 77.6% of comparable Treasuries, according to MMD, while 30-year munis were 87.9% of comparable Treasuries. Also, as of Monday’s close, 30-year tax-exempt triple-A rated general obligation bonds were at 90.6% of the comparable London Interbank Offered Rate.
One of the craziest, most transformative years ever in state and local government finance will end with a whimper this week.
Municipalities are slated to sell just $74.1 million of bonds this week, according to data from The Bond Buyer and Ipreo LLC, after having floated $611.7 million last week.
In the new-issue market yesterday, Chautauqua, N.Y., competitively sold $17 million of public improvement bonds to Roosevelt & Cross, with a net interest cost of 4.17%.
The bonds mature from 2011 through 2030, with coupons ranging from 3% in 2011 to 4.5% in 2030. None of the bonds were formally re-offered.
The bonds, which are callable at par in 2019, are rated A-plus by Standard & Poor’s.
Vernon Township, N.J., competitively sold $13.5 million of bond anticipation notes to Jefferies & Co.
The Bans mature in 2011, with an effective rate of 0.84% and a 2% coupon.
Ithaca, N.Y., competitively sold $11.3 million of public improvement bonds to UBS Financial Services, with an NIC of 4.10%.
The bonds mature from 2011 through 2027, with coupons ranging from 4% in 2011 to 4.5% in 2027. None of the bonds were formally re-offered.
The bonds, which are callable at par in 2019, are rated A1 by Moody’s Investors Service.
Ithaca also competitively sold $7.7 million of taxable public improvement bonds to Morgan Keegan & Co., with an NIC of 6.06%.
The bonds mature from 2011 through 2034, with yields ranging from 2.00% with a 5% coupon in 2011 to 6.50% with a 6.375% coupon in 2034. Bonds maturing in 2012, 2013, 2017, and from 2028 through 2030 were not formally re-offered.
These bonds are callable at par in 2019.
The proceeds of the tax-exempt portion will be used to refund bond anticipation notes issued for a pastiche of purposes, from repairing a bridge to buying software to renovating an ice skating rink. Proceeds from the taxable batch will be used to refund notes issued to build a parking garage.
Trades reported by the Municipal Securities Rulemaking Board yesterday showed little movement. A dealer bought from a customer California 5.5s of 2039 at 5.73%, even with where they were sold Monday. Bonds from an interdealer trade of insured New York State Thruway Authority 4.75s of 2029 yielded 4.40%, even with where they were sold Monday.
A dealer bought from a customer insured Minnesota 5s of 2023 at 2.26%, even with where they were sold Monday. A dealer sold to a customer taxable Detroit City School District Build America Bonds 7.747s of 2039 at 7.78%, even with where they were sold Monday.
A dealer sold to a customer taxable New York State BABs 5.2s of 2022 at 5.55%, even with where they were sold Monday. A dealer sold to a customer taxable Government Development Bank for Puerto Rico 6s of 2022 at 6.00%, even with where they were sold Monday.
A dealer sold to a customer Georgia 5s of 2027 at 3.56%, even with where they were sold Monday. A dealer sold to a customer taxable Virginia College Building Authority BABs 5.4s of 2026 at 5.74%, even with where they were sold Monday.
A dealer bought from a customer Utah 5s of 2022 at 3.25%, even with where they were sold Monday. Bonds from an interdealer trade of taxable New Orleans BABs 8.8s of 2039 yielded 8.29%, even with where they were sold Monday.
A dealer sold to a customer Tennessee 5s of 2029 at 3.69%, even with where they were sold Monday. Bonds from an interdealer trade of Massachusetts Health and Educational Facilities Authority 5.25s of 2028 yielded 3.78%, even with where they were sold Monday.
In economic data released yesterday, the consumer confidence index climbed to 52.9 in December from an upwardly revised 50.6 last month. Economists polled by Thomson Reuters predicted the index would be 52.0.
