The municipal market was mostly unchanged yesterday, with a slightly weaker tone, as California’s East Bay Municipal Utility District priced $400 million of taxable Build America Bonds.
“We’re pretty flat,” a trader in New York said. “There’s a little bit of activity right now, but there’s not a lot of movement.”
“It feels a little bit weaker, but I don’t know if it’s enough to really move the scale,” a trader in Los Angeles said. “I’d say were unchanged to maybe a basis point or so weaker in spots.”
Morgan Stanley priced $400 million of taxable water system subordinated revenue BABs for the East Bay district.
The BABs mature in 2040, yielding 5.874%, priced at par, or 3.82% after the 35% federal subsidy. The bonds were priced to yield 120 basis points over the comparable Treasury yield.
The credit is rated Aa2 by Moody’s Investors Service, AAA by Standard & Poor’s, and AA by Fitch Ratings.
The Treasury market mostly showed some losses yesterday. The benchmark 10-year note finished at 3.73% after opening at 3.70%. The yield on the two-year note finished at 0.88% after also opening at 0.88%. The yield on the 30-year bond finished at 4.68% after opening at 4.64%.
The Municipal Market Data triple-A scale yielded 2.87% in 10 years and 3.80% in 20 years yesterday, following levels of 2.87% and 3.78% on Wednesday. The scale yielded 4.17% in 30 years yesterday, matching Wednesday’s level.
Wednesday’s triple-A muni scale in 10 years was at 77.6% of comparable Treasuries and 30-year munis were 89.7% , according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 94.1% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market yesterday, Piper Jaffray & Co. priced $160.1 million of revenue bonds for the Minnesota Agricultural and Economic Development Board.
The bonds mature in 2011, 2012, and from 2014 through 2023, with term bonds in 2025 and 2030. Yields range from 1.16% with 3% coupon in 2011 to 5.07% with a 5% coupon in 2030.
The bonds, which are callable at par in 2020, are insured by Assured Guaranty Corp. The underlying credit is rated A-minus by both Standard & Poor’s and Fitch.
Wells Fargo Securities priced $113.8 million of GOs for Texas.
The bonds mature from 2014 through 2030, with a term bond in 2034. Yields range from 1.30% with a 5% coupon in 2014 to 4.28% with a 5% coupon in 2034.
The bonds, which are callable at par in 2020, are rated Aa1 by Moody’s and AA-plus by Standard & Poor’s.
RBC Capital Markets priced $109.8 million of bonds for Gulf Breeze, Fla., in two series.
Bonds from the $69.8 million series of floating-rate demand revenue bonds mature in 2020, yielding 4.50% priced at par. The bonds have mandatory tender dates ranging from 2011 through 2019, with coupons ranging from 2% to 4.5%, respectively. They are not callable.
Bonds from the $40 million series of revenue refunding bonds mature from 2021 through 2023, with term bonds in 2033 and 2039. Yields range from 4.39% with a 5% coupon in 2021 to 5.20% with a 5% coupon in 2039. The bonds are callable at par in 2020.
The credit is rated A2 by Moody’s and A-plus by Standard & Poor’s.
Rochester, N.Y., competitively sold $29.6 million of bond anticipation notes to Jefferies & Co. with a net interest cost of 0.50%.
The Bans mature in February 2011 with a 1.5% coupon. They were not formally re-offered.
Lyndhurst, N.J., competitively sold $29.1 million of water utility Bans to Janney Montgomery Scott LLC with a NIC of 0.73%.
The Bans mature in February 2011 with a 1.5% coupon. They were not formally re-offered.
Trades reported by the Municipal Securities Rulemaking Board yesterday showed some losses. A dealer sold to a customer California 5.125s of 2036 at 5.86%, even with where they were sold Wednesday.
Bonds from an interdealer trade of Texas 4.75s of 2035 yielded 4.64%, one basis point higher than where they traded Wednesday.
Bonds from an interdealer trade of taxable Illinois BAB 6.63s of 2035 yielded 6.73%, even with where they were sold Wednesday.
A dealer bought from a customer Pennsylvania Turnpike Commission 5.125s of 2040 at 5.03%, even with where they were sold Wednesday.
Bonds from an interdealer trade of Port Authority of New York and New Jersey 5s of 2039 yielded 4.50%, up two basis points from where they were sold Wednesday.
Bonds from an interdealer trade of Clark County, Nev., 5s of 2030 yielded 5.12%, even with where they traded Wednesday. A dealer sold to a customer taxable New York Metropolitan Transportation Authority BABs 6.65s of 2039 at 6.50%, even with where they were sold Wednesday.
In economic data released yesterday, initial jobless claims fell by 43,000 to 440,000 for the week ending Feb. 6. Continuing claims decreased to 4.538 million for the week ending Jan. 30.
Economists polled by Thomson Reuters expected 465,000 initial jobless claims and 4.6 million continuing claims.
