The municipal market was mostly unchanged yesterday, with a slightly firmer tone amid fairly light secondary trading.
“It’s fairly quiet,” a trader in New York said. “I’m not seeing a whole lot of trading going on, and I’m not really seeing any movement in either direction at this point. We’re pretty flat and pretty quiet right now.”
“There’s maybe some slight scattered firmness out there, but it’s quiet,” a trader in Los Angeles said. “I’d say we’re unchanged overall.”
In the new-issue market yesterday, Clark County, Nev., priced a two-pronged financing totaling $800 million on behalf of McCarran International Airport in what is slated to be this week’s largest negotiated sale.
Pricing information was not available by press time.
The larger portion of the Citi-led deal consists of $450 million of senior-lien passenger facility charge revenue bonds, and another $350 million of subordinate-lien airport system revenue bonds.
Both portions are rated Aa3 by Moody’s Investors Service and A-plus by Standard & Poor’s. The deal includes all new-money tax-exempt bonds.
The Treasury market showed some gains yesterday. The yield on the benchmark 10-year note opened at 3.65% and was quoted near the end of the session at 3.60%. The yield on the two-year note opened at 0.87% and was quoted near the end of the session at 0.84%.
The yield on the 30-year bond was quoted near the end of the session at 4.50% after opening at 4.53%.
Yesterday’s Municipal Market Data triple-A scale yielded 3.02% in 10 years and 3.74% in 20 years, compared to levels of 3.03% and 3.74%, respectively, Wednesday. The scale yielded 4.05% in 30 years yesterday, the same as on Wednesday.
As of Wednesday’s close, the triple-A muni scale in 10 years was at 81.9% of comparable Treasuries and 30-year munis were 88.7% of comparable Treasuries, according to MMD, while. 30-year tax-exempt triple-A general obligation bonds were at 91.5% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market yesterday, the Florida Board of Education competitively sold $204.1 million of taxable Build America Bonds to Wells Fargo Securities, with a true interest cost of 5.71%.
The bonds mature from 2019 through 2030, with term bonds in 2035 and 2039. Yields range from 4.65% priced at par in 2020, or 3.02% after the 35% federal subsidy, to 6.00% with a 5.9% coupon in 2039, or 3.90% after the subsidy. Bonds maturing in 2019 and 2021 were not formally re-offered.
The Florida Board of Education also competitively sold $45.9 million of tax-exempt public education capital outlay bonds to Citi, with a TIC of 2.34%.
The bonds mature from 2010 through 2018, with yields ranging from 1.15% with a 5% coupon in 2013 to 3.02% with a 5% coupon in 2018. Bonds maturing from 2010 through 2012 were not formally re-offered.
The credit is rated Aa1 by Moody’s, AAA by Standard & Poor’s, and AA-plus by Fitch Ratings.
Morgan Keegan & Co. priced $159.3 million of airport refunding revenue bonds for Tennessee’s Memphis-Shelby County Airport Authority, subject to the alternative minimum tax.
The bonds mature from 2010 through 2025, with yields ranging from 2.30% with a 4% coupon in 2012 to 5.35% with a 5.75% coupon in 2025. Bonds maturing in 2010 and 2011 were decided via sealed bid.
The bonds, which are callable at par in 2020, are rated A2 by Moody’s, A-minus by Standard & Poor’s, and A-plus by Fitch.
Bank of America Merrill Lynch priced $155 million of health care facilities revenue bonds for the Escambia County, Fla., Health Facilities Authority.
The bonds mature from 2011 through 2020, with term bonds in 2024, 2029, and 2036. Yields range from 2.18% with a 3% coupon in 2011 to 6.05% with a 6% coupon in 2036.
The bonds, which are callable at par in 2020, are rated Baa1 by Moody’s and BBB-plus by Fitch.
JPMorgan priced for $129.7 million of hospital revenue bonds for the Tarrant County, Tex., Health Facilities Development Corp.
The bonds mature from 2010 through 2025, with term bonds in 2030, 2033, and 2036. Yields range from 1.15% with a 3% coupon in 2011 to 5.10% with a 5% coupon in 2036. Bonds maturing in 2010 were decided via sealed bid.
The bonds, which are callable at par in 2019, are rated Aa3 by Moody’s and AA-minus by Standard & Poor’s.
In economic data released yesterday, initial jobless claims increased to 482,000 for the week ending Jan. 16, the largest number of initial claims since November. Initial claims for the week ending Jan. 9 were revised higher to 446,000.
Economists expected 440,000 initial jobless claims, according to the median estimate from Thomson Reuters.
The composite index of leading economic indicators gained 1.1% in December. LEI increased a revised 1.0% in November. Economists polled by Thomson Reuters predicted the index would be up 0.7% in the month.
