The municipal market was unchanged to slightly firmer yesterday, amid fairly light trading activity in the secondary.
“There’s not too much happening, but there’s a bit of a firmer tone,” a trader in New York said. “We’re probably better a basis point, maybe two in spots, but it’s fairly quiet.”
“We’re maybe a little bit firmer in spots, but it’s quiet,” a trader in Los Angeles said. “Overall, not too much going on, but we are a little bit better. We’re maybe two or so basis points better at most, but we’re about unchanged to maybe one better almost across the board. It’s probably closer to one better than flat.”
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 3.64%. The yield on the two-year note opened at 0.85% and was quoted near the end of the session at 0.86%. The yield on the 30-year bond was quoted near the end of the session at 4.55% after opening at 4.57%.
Yesterday’s Municipal Market Data triple-A scale yielded 2.96% in 10 years and 3.82% in 20 years, compared to levels of 2.98% and 3.82% on Monday. The scale yielded 4.20% in 30 years yesterday, following Monday’s level of 4.22%.
As of Monday’s close, the triple-A muni scale in 10 years was at 81.6% of comparable Treasuries and 30-year munis were at 92.5%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 95.3% of the comparable London Interbank Offered Rate.
In the new-issue market yesterday, Siebert Brandford Shank & Co. priced $133 million of state clean water and drinking water revolving funds revenue bonds for the New York State Environmental Facilities Corp.
The bonds mature from 2010 through 2029, with yields ranging from 0.38% with a 2% coupon in 2011 to 4.04% with a 5% coupon in 2029. Bonds maturing in 2010 were decided via sealed bid.
The bonds, which are callable at par in 2020, are rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s and Fitch Ratings.
Portland, Ore., competitively sold $72.7 million of first-lien water system revenue and refunding bonds to Bank of America Merrill Lynch with a true interest cost of 3.93%.
The bonds mature from 2011 through 2031, with a term bond in 2035. Yields range from 0.35% with a 2.5% coupon in 2011 to 4.25% with a 4% coupon in 2031.
Bonds maturing in 2012, from 2019 through 2023, and in 2035 were not formally re-offered.
The bonds are rated Aa1 by Moody’s.
Milwaukee competitively sold $129.2 million of GO promissory notes to Barclays Capital with a TIC of 2.32%.
The paper matures from 2011 through 2020, with yields ranging from 0.71% with a 4% coupon in 2012 to 3.13% with a 5% coupon in 2020. Bonds maturing in 2011, 2015, and 2019 were not formally re-offered. The credit is rated Aa2 by Moody’s, AA by Standard & Poor’s, and AA-plus by Fitch.
Morgan Stanley priced $85 million of variable-rate bonds for the Michigan State Hospital Finance Authority.
The bonds mature in April 2010, yielding 0.24% priced at par. The long-term credit is rated Aa1 by Moody’s, AA by Standard & Poor’s, and AA-plus by Fitch. The short-term credit is rated VMIG-1 by Moody’s, A-1-plus by Standard & Poor’s, and F1-plus by Fitch.
Morgan Stanley priced $82.1 million of clean water revenue and revenue refunding bonds for Wisconsin, in two series.
Bonds from the $67.9 million Series 1 mature from 2012 through 2016, and from 2026 through 2031, with yields ranging from 0.75% with a 3% coupon in 2012 to 4.19% with a 5% coupon in 2031. The bonds are callable at par in 2020.
Bonds from the $14.2 million Series 2 mature from 2019 through 2021, yielding 3.16%, 3.25%, and 3.35%, respectively, all with 5% coupons. The bonds are callable at par in 2020.
The credit is rated Aa1 by Moody’s and AA-plus by Standard & Poor’s and Fitch.
The Des Moines Independent Community School District competitively sold $70 million of school infrastructure sales, services, and use tax revenue bonds to JPMorgan with a TIC of 4.19%.
The bonds mature from 2011 through 2029 and were not formally re-offered.
The bonds, which are callable at par in 2018, were rated A-plus by Standard & Poor’s.
Oklahoma City competitively sold $64.4 million of GOs to Robert W. Baird & Co. with a TIC of 3.47%.
The bonds mature from 2012 through 2027, with a term bond in 2030. Yields range from 3.60% with a 4% coupon in 2024 to 3.90% with a 4% coupon in 2027. Bonds maturing from 2012 through 2023 and in 2030 were not formally re-offered.
The bonds, which are callable at par in 2020, are rated Aa1 by Moody’s and AAA by Standard & Poor’s.
Wisconsin priced $131 million of new-money and refunding clean-water revenue bonds. Morgan Stanley was senior manager and MR Beal & Co. was co-senior manager
In economic data released yesterday, pending home sales inched up 1.0% to a reading of 96.6 in December from a revised 16.4% decline to 95.6 in November. Thomson Reuters’ poll of economists had predicted a 97.1 reading.
