The municipal market was unchanged with a slightly firmer tone yesterday amid fairly light trading activity in the secondary market.
“There’s maybe a little bit of a firmer tone out there, but there still isn’t a whole lot of activity,” a trader in New York said. “We maybe got a little stronger on some Treasury gains early on today, but after the data, Treasuries are back around unchanged, and so are we. I think it’s still going to take some time for people in our market to come off the sidelines for the most part.”
The Treasury market was mixed yesterday. The benchmark 10-year note finished at 3.54% after opening at the same level. The 30-year Treasury bond finished at 4.43% after opening at 4.41%. The two-year note yield finished at 0.85% after opening at 0.87%.
The triple-A scale yielded 2.95% in 10 years yesterday, matching Monday, but still much stronger than the late March level of 3.09%, according to Municipal Market Data.
The 20-year yield was 3.75%, matching Monday, while the scale yielded 4.04% in 30 years, which also matched Monday.
Monday’s triple-A muni scale in 10 years was at 84.1% of comparable Treasuries and 30-year munis were at 91.8%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 95.7% of the comparable London Interbank Offered Rate.
In the new-issue market yesterday, Citi priced $270 million of bonds for Snohomish County, Wash., Public Utility District No. 1 in two series, including $129 million of taxable electric system Build America Bonds.
The BABs mature from 2016 through 2023, with term bonds in 2029 and 2035. Pricing information was not available by press time.
The remainder of the debt was tax-exempt, maturing from 2013 through 2016. Pricing information on this portion was also unavailable.
The credit is rated Aa3 by Moody’s Investors Service and AA-minus by Standard & Poor’s.
Wells Fargo Securities priced $137.5 million of GOs for the University of Connecticut in two series.
Bonds from the $97.1 million new-money series mature from 2011 through 2030, with yields ranging from 0.76% with a 3% coupon in 2012 to 3.93% with a 5% coupon in 2030.
Bonds maturing in 2011 were not formally re-offered.
Bonds from the $40.4 million refunding series mature from 2011 through 2021, with yields ranging from 0.76% with a 3% coupon in 2012 to 3.27% with a 5% coupon in 2021. Bonds maturing in 2011 were not formally re-offered.
The bonds, which are callable at par in 2020, are rated Aa2 by Moody’s and AA by both Standard & Poor’s and Fitch Ratings.
Barclays Capital priced $134.3 million of bonds for Pennsylvania State University.
The bonds mature from 2017 through 2030, with term bonds in 2035 and 2040. Yields range from 2.71% with a 4% coupon in 2017 to 4.31% with a 5% coupon in 2040.
The bonds, which are callable at par in 2020, are rated Aa1 by Moody’s and AA by Standard & Poor’s.
Alabama competitively sold $110 million of GO capital improvement bonds to Citi with a true interest cost of 3.89%.
The bonds mature from 2013 through 2032, with yields ranging from 1.14% with a 4% coupon in 2013 to 3.95% with a 5% coupon in 2030. Bonds maturing in 2015, 2016, 2019, 2020, 2027, 2031, and 2032 were not formally re-offered.
The bonds, which are callable at par in 2019, are rated Aa1 by Moody’s, AA by Standard & Poor’s, and AA-minus by Fitch.
The Orange County, Calif., Sanitation District competitively sold $80 million of taxable BABs to Citi with a TIC of 3.68%.
The bonds mature from 2036 and 2040, yielding 5.56% priced at par in 2036, or 3.61% after the 35% federal subsidy. The 2040 bonds, which have a 5.58% coupon, or 3.62% after the subsidy, were not formally re-offered.
The credit is rated AAA by both Standard & Poor’s and Fitch.
Wells Fargo priced $75 million of gas revenue bonds for the Municipal Gas Authority of Georgia.
The bonds mature in 2011, yielding 0.65% with a 2% coupon.
The credit is rated MIG-1 by Moody’s, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch.
Wells Fargo also priced $56.3 million of GO refunding bonds for Richland County, S.C., School District No. 1.
The bonds mature from 2013 through 2026, with yields ranging from 1.15% with a 2% coupon in 2013 to 3.87% with a 4% coupon in 2026.
The bonds, which are callable at par in 2020, are rated Aa1 by Moody’s and AA by Standard & Poor’s.
Also, Morgan Keegan & Co. priced $22.3 million of GO refunding bonds for Sugar Land, Tex.
The bonds mature from 2011 through 2026, with yields ranging from 0.55% with a 2% coupon in 2011 to 4.08% with a 4% coupon in 2026.
The bonds, which are callable at par in 2019, are rated AA-plus by Standard & Poor’s and AAA by Fitch.
In economic data released yesterday, wholesale inventories rose 0.4% in March, while sales increased 2.4%, and the inventories-to-sales ratio dropped to a record low.
Wholesale sales increased 2.4% for the month, more than twice economists’ expectations, as nondurable sales increased 2.8%.
Economists expected wholesale inventories to increase 0.5% and for sales to increase 1.1%, according to the median estimate from Thomson Reuters.
