The municipal market was flat to slightly firmer Thursday amid light to moderate secondary trading activity.
“There’s a slightly firmer tone, but the activity is somewhat light,” a trader in Los Angeles said.
“We’re maybe a basis point better in spots, but you could call it flat really and not be wrong,” the trader said.
The Municipal Market Data triple-A 10-year scale fell one basis point Thursday to 3.38%, the 20-year dropped one basis point to 4.61%, and the scale for 30-year bonds declined one basis point to 4.94%.
Thursday’s triple-A muni scale in 10 years was at 91.4% of comparable Treasuries and 30-year munis were at 103.8%, according to MMD.
Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 109.1% of the comparable London Interbank Offered Rate.
Treasuries showed losses Thursday. The benchmark 10-year note finished at 3.71% after opening at 3.65%. The 30-year bond finished at 4.78% after opening at 4.71%. The two-year note finished at 0.85% after opening at 0.80%.
In the new-issue market Thursday, South Carolina competitively sold $126.2 million of GO debt to JPMorgan.
Bonds from the $66 million Series B mature from 2012 through 2031, with yields ranging from 0.40% with a 2% coupon in 2012 to 4.30% with a 4.125% coupon in 2026. Bonds maturing in 2020, 2021, and from 2027 through 2031 were not formally re-offered. The bonds are callable at par in 2021.
Bonds from the $15 million Series C mature from 2012 through 2031, with yields ranging from 0.40% with a 2% coupon in 2012 to 4.48% with a 5% coupon in 2029. Bonds maturing in 2030 and 2031 were not formally re-offered. The bonds are callable at par in 2021.
Bonds from the $19 million Series D mature from 2012 through 2031, with yields ranging from 0.37% with a 2% coupon in 2012 to 4.50% priced at par in 2028. Bonds maturing from 2029 through 2031 were not formally re-offered. The bonds are callable at par in 2021.
Bonds from the $26 million Series E mature from 2012 through 2031, with yields ranging from 0.40% with a 2% coupon in 2012 to 4.50% priced at par in 2028. Bonds maturing from 2029 through 2031 were not formally re-offered. The bonds are callable at par in 2021.
This sale follows Wednesday’s competitive South Carolina offering, in which $323.5 million of refunding bonds over two series were also sold to JPMorgan, with a true interest cost of 1.62%.
Bonds from the $197.2 million series mature from 2012 through 2017, with yields ranging from 0.75% with a 5% coupon in 2013 to 2.24% with a 5% coupon in 2017. Bonds maturing in 2012 were not formally re-offered. The bonds are not callable.
Bonds from the $126.3 million series mature from 2012 through 2018, with yields ranging from 0.75% with a 5% coupon in 2013 to 2.57% with a 5% coupon in 2018. Bonds maturing in 2012 were not formally re-offered. The bonds are not callable.
The credit is rated Aaa by Moody’s Investors Service, AA-plus by Standard & Poor’s, and AAA by Fitch Ratings.
Elsewhere in Thursday’s new-issue market, PNC Capital Markets priced $124 million of GO bonds for Allegheny County, Pa., in two series.
Bonds from the $110.2 million Series C-65 mature from 2011 through 2026, with a term bond in 2031. Yields range from 0.95% with a 1.5% coupon in 2011 to 5.40% with a 5.25% coupon in 2031. The bonds are callable at par in 2021.
Bonds from the $13.8 million Series C-66 mature from 0.95% with a 1.5% coupon in 2011 to 4.14% with a 4% coupon in 2020. The bonds are not callable.
The credit is rated A1 by Moody’s and A-plus by Standard & Poor’s.
Also, Morgan Keegan & Co. priced $90.2 million of refunding revenue bonds for the Memphis-Shelby County Airport Authority, all subject to the alternative minimum tax.
Bonds from the $57.3 million Series A-1 mature from 2012 through 2022, with yields ranging from 2.30% with a 4% coupon in 2013 to 5.50% with a 6% coupon in 2022. Bonds maturing in 2012 were decided via sealed bid. The bonds are callable at par in 2021.
Bonds from the $32.9 million Series A-2 mature from 2011 through 2018, with yields ranging from 2.30% with a 4% coupon in 2013 to 4.57% with a 5.5% coupon in 2018. Bonds maturing in 2011 and 2012 were decided via sealed bid. The bonds are not callable.
The credit is rated A2 by Moody’s, A-minus by Standard & Poor’s, and A-plus by Fitch.
In economic data released Thursday, initial jobless claims dropped 36,000 to 383,000 for the week ending Feb. 5, the lowest level since July 2008.
Continuing claims fell by 47,000 to 3.888 million for the week ending Jan. 29.
January snowstorms closed many state unemployment offices. The closures caused initial claims filings to spike once the offices reopened. Those fluctuations have now evened out in the initial claims data.
Economists expected 410,000 initial jobless claims and 3.900 million continuing claims, according to the median estimate from Thomson Reuters.
Wholesale inventories increased 1.0% in December. Wholesale sales increased 0.4%. Economists expected inventories would increase 0.7% and sales would gain 1.3%, according to the median estimate from Thomson.
