NEW YORK – The California municipal market was mostly flat Monday amid somewhat light secondary trading activity and declining Treasury yields.
“We’re pretty quiet,” a trader in San Francisco said. “There’s a bit of an uptick in Treasuries today, and a lot of people in our market are just sitting on the sidelines for now. I’d say we’re just unchanged.”
The Municipal Market Data’s triple-A scale yielded 2.36% in 10 years Monday, matching Friday, while the 20-year scale also remained flat, at 3.36%. The scale for 30-year debt yielded 3.77%, even with Friday.
Monday’s triple-A muni scale in 10 years was at 94.8% of comparable Treasuries and 30-year munis were at 96.2%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 106.8% of the comparable London Interbank Offered Rate.
The Treasury market was mostly firmer Monday. The benchmark 10-year note was quoted recently at 2.49% after opening at 2.56%.
The 30-year bond was quoted recently at 3.93% after opening at 3.98%. The two-year note was quoted recently at 0.36% after also opening at 0.36%.
In the California new-issue market this week, The Alameda County, Calif., Joint Powers Authority will add to the negotiated activity when it sells $320 million of recently upgraded lease revenue bonds on Tuesday to finance multiple capital projects.
Barclays Capital will price the two-pronged bond offering, which is rated A1 by Moody's, AA by Standard & Poor's, and was upgraded to AA-minus from A-plus earlier this month by Fitch due in part to financial strength in the face of ongoing economic, federal, and state pressures, a large, diverse economy, and a low to moderate debt burden, among other factors, according to an Oct. 6 Fitch report.
The bonds, which mature serially from 2036 to 2045, are backed by Alameda County's lease rental payments to the authority, subject to annual appropriation by the county, and will finance some of the costs associated with the Alameda County Medical Center Highland Hospital rebuilding project.
In economic data released Monday, industrial production dropped 0.2% in September, the first decline in 15 months.
Industrial capacity utilization was 74.7% for the month, down from an upwardly revised 74.8% in August, originally reported as 74.7%.
Economists expected industrial production would rise 0.2% and that capacity utilization would be 74.8%, according to the median estimate from Thomson Reuters.
Previous Session's Activity
The most actively traded security in the state yesterday was taxable California BABs 7.95s of 2036, which traded 142 times at a high of 110.185 and a low of 105.416.
