NEW YORK – The California municipal market was mostly flat, though with a slightly weaker tone, amid light to moderate secondary trading activity Thursday.
“We’re definitely flat, but there might have even been a bit of a weaker tone,” a trader in San Francisco said. “It’s felt pretty firm for the last several weeks, but today is feeling a little bit weaker, even if it’s not going to be reflected in the scale.”
The Treasury market was somewhat mixed Thursday. The benchmark 10-year note was quoted recently at 2.99% after opening at 2.98%. The 30-year bond was quoted recently at 4.08% after opening at 4.06%. The two-year note was quoted recently at 0.59% after opening at 0.61%.
The Municipal Market Data triple-A scale yielded 2.57% in 10 years and 3.67% in 20 years Thursday, matching levels of 2.57% and 3.67% Wednesday. The scale yielded 3.97% in 30 years Thursday, matching 3.97% Wednesday.
Thursday’s triple-A muni scale in 10 years was at 86.0% of comparable Treasuries and 30-year munis were at 97.5%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 105.3% of the comparable London Interbank Offered Rate.
In the California new-issue market Thursday, Barclays Capital priced $190.8 million of first priority subordinated revenue notes for California’s Turlock Irrigation District.
The notes mature in Aug. 2011, yielding 0.75% priced at par.
The credit is rated MIG-1 by Moody’s Investors Service, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch Ratings.
Bank of America Merrill Lynch priced $111.4 million of revenue bonds for the California Municipal Finance Authority.
The bonds mature from 2013 through 2026, with term bonds in 2030 and 2040. Yields range from 2.54% with a 3% coupon in 2013 to 5.83% with a 5.75% coupon in 2040.
The bonds, which are callable at par in 2020, are rated Baa1 by Moody’s and A-minus by Fitch.
In economic data released Thursday, initial jobless claims decreased to 457,000 in the week ending July 24, the third decline in four weeks.
Continuing claims increased to 4.565 million for the week ending July 17, up 81,000 from the previous week.
Economists expected 460,000 initial claims and 4.540 million continuing claims, according to the median estimate from Thomson Reuters.
Previous Session's Activity
The most actively traded security in the state yesterday was Walnut Energy Control Authority 6.23s of 2029, which traded 154 times at a high of par and a low of 98.125.
