The municipal market was unchanged to slightly weaker yesterday, as $2.15 billion of Florida’s Citizens Property Insurance Corp. debt was priced in the primary.
“There’s some weakness on the short to intermediate part of the curve, maybe through 10, 15 years,” a trader in New York said. “We’re probably cheaper by a basis point or two inside of about 10 or 15 years, but we’re pretty much flat on the long end. I’d say we’re pretty much flat to a little bit weaker.”
“We’re definitely cheapening up a little bit, particularly on the shorter end,” a trader in Los Angeles said. “I’m not really seeing too much movement out long, but we’re probably a good two or three basis points cheaper on the shorter end.”
In the new-issue market yesterday, JPMorgan priced $2.15 billion of high-risk account senior secured bonds for CPIC in two series.
Bonds from the $1.75 billion Series A-1 mature from 2013 through 2017, with yields ranging from 2.83% with a 3% coupon in 2013 to 4.16% with a 5% coupon in 2017. Portions of bonds maturing from 2014 through 2017 are insured by Assured Guaranty Municipal Corp. All remaining bonds are uninsured.
The deal also contained $400 million of Series A-2 short-term notes, which mature in 2011, yielding 1.35% with a 2% coupon.
None of the bonds are callable. The long-term credit is rated A2 by Moody’s Investors Service and A-plus by Standard & Poor’s. The short-term debt is rated MIG-1 by Moody’s and SP-1-plus by Standard & Poor’s.
The debt is being issued to provide resources to help the corporation meet its potential claims-paying needs for the 2010 hurricane season.
The Treasury market showed losses yesterday. The benchmark 10-year note was quoted near the end of the session with a yield of 3.69% after opening at 3.66%.
The yield on the two-year was quoted near the end of the session at 0.99% after opening at 0.97%. The yield on the 30-year bond was quoted near the end of the session at 4.61% after opening at 4.57%.
The Treasury Department yesterday auctioned $44 billion of two-year notes with a 1% coupon at a 1.00% yield, a price of 100.00. The bid-to-cover ratio was 3.00. Federal Reserve banks also bought $1.49 billion for their own account in exchange for maturing securities.
The Municipal Market Data triple-A scale yielded 2.88% in 10 years and 3.78% in 20 years yesterday, compared to Monday’s levels of 2.85% and 3.78%. The scale yielded 4.15% in 30 years yesterday, matching Monday.
Monday’s triple-A muni scale in 10 years was at 77.9% of comparable Treasuries and 30-year munis were at 90.6%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 95.0% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market yesterday, Citi priced $475 million of revenue anticipation notes for the New York’s Metropolitan Transportation Authority. The Rans mature in 2011, yielding 0.38%, and are rated MIG-1 by Moody’s.
Barclays Capital priced $203.5 million of pollution-control refunding revenue bonds for Farmington, N.M., in two series. Bonds from the $103.5 million Series A mature in 2029, yielding 2.75% priced at par.
The bonds are not callable. Bonds from the $100 million Series B mature in 2029, yielding 2.75% priced at par. The bonds are not callable.
The credit is rated A1 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch Ratings.
South Carolina competitively sold $170 million of general obligation state economic development bonds to Bank of America Merrill Lynch with a true interest cost of 3.27%.
The bonds mature from 2011 through 2025, with yields ranging from 0.90% with a 5% coupon in 2013 to 3.84% with a 2% coupon in 2024. Bonds maturing in 2011, 2012, 2015, 2018, and 2025 were not formally re-offered.
The bonds, which are callable at par in 2020, are rated triple-A by both Moody’s and Fitch, and are rated AA-plus by Standard & Poor’s.
Cobb County, Ga., competitively sold $113.5 million of GO tax anticipation notes to Wells Fargo Securities with a net interest cost of 0.27%.
The Tans mature in Dec. 2010 with a 1.5% coupon, and were not formally re-offered.
The credit is rated MIG-1 by Moody’s, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch.
RBC Capital Markets priced for retail investors $385.4 million of revenue financing system refunding bonds for the University of Texas Board of Regents ahead of institutional pricing today.
The bonds mature from 2010 through 2024, with yields ranging from 0.45% with a 4% coupon in 2011 to 3.44% with a 5% coupon in 2024.
Bonds maturing in 2022 and 2023 were not offered during the retail order period. Bonds maturing in 2010 will be decided via sealed bid.
The bonds, which are not callable, are rated triple-A by all three major rating agencies.
In economic data released yesterday, existing home sales fell 0.6% in February to a 5.02 million annual rate as inventories continued to rise.
Sales have declined for three consecutive months following a surge in October and November as buyers rushed to secure the homebuyer tax credit.
The supply of existing home sales increased to 8.6 months from 7.8 months in January.
Sales in January declined 7.2% to 5.05 million sales at an annual rate, unrevised from last month.
Economists expected 5.0 million existing home sales in February, according to the median estimate from Thomson Reuters.
