NEW YORK – The California municipal market remained slightly firmer Thursday amid light to moderate secondary trading activity.
“We definitely feel firmer,” a trader in Los Angeles said. “It’s just more of the same of what we’ve been seeing the past few weeks. Market feels stronger, and we’re probably up a good one or two basis points, particularly on the longer end. On the short end, we might be fairly flat, but overall, I’d say we’re firming up a little bit again.”
The Treasury market showed some gains Thursday. The benchmark 10-year note was quoted recently at 2.91% after opening at 2.95%. The 30-year bond was quoted recently at 4.06% after opening at 4.08%. The two-year note was quoted recently at 0.54% after opening at 0.57%.
The Municipal Market Data triple-A scale yielded 2.56% in 10 years and 3.62% in 20 years Wednesday, following levels of 2.57% and 3.64% Tuesday. The scale yielded 3.95% in 30 years Wednesday, matching 3.96% Tuesday.
Thursday’s triple-A muni scale in 10 years was at 88.0% of comparable Treasuries and 30-year munis were at 97.3%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 105.1% of the comparable London Interbank Offered Rate.
In the California new-issue market Thursday, Citi priced $169.8 million of general obligation bonds for the San Diego Unified School District in three series. Pricing information was not available by press time.
In Wednesday’s retail pricing, bonds from the $83.6 million series of capital appreciation bonds mature from 2030 through 2045, with yields to maturity ranging from 6.15% in 2030 to 6.66% in 2045. Bonds from the $5.2 million series of CABs mature from 2045 through 2047, with yields to maturity ranging from 6.66% in 2045 to 6.71% in 2047. Bonds from the $75.0 million series of convertible CABs mature from 2047 through 2050, all yielding 6.50%.
In Thursday’s institutional pricing, the series were increased to $83.7 million, $11.0 million, and $75.0 million, respectively.
The bonds are rated Aa1 by Moody’s and AA by Standard & Poor’s.
In economic data released Thursday, initial jobless claims increased to 479,000 for the week ending July 31, above economists' estimates and the highest level since April.
Continuing claims fell to 4.537 million for the week ending July 24.
Economists expected 453,000 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 Los Angeles Community College District 6.68s of 2036, which traded 166 times at a high of 103.790 and a low of 100.100.
