NEW YORK – The California municipal market was weaker Wednesday amid light to moderate secondary trading.
“It’s just a weaker day, pretty much across the board,” a trader in Los Angeles said. “The focus, though, is on the primary.”
Municipal Market Data's triple-A scale yielded 2.55% in 10 years Wednesday, up seven basis points from Tuesday’s 2.48%, while the 20-year scale yielded 3.48%, up five basis points from Tuesday’s 3.43%. The scale for 30-year debt increased five basis points to 3.86% from 3.81% Tuesday.
Tuesday’s triple-A muni scale in 10 years was at 93.7% of comparable Treasuries and 30-year munis were at 96.4%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 106.5% of the comparable London Interbank Offered Rate.
The Treasury market showed losses Wednesday. The benchmark 10-year note was quoted recently at 2.73% after opening at 2.64%. The 30-year bond was quoted recently at 4.06% after opening at 4.00%. The two-year note was quoted recently at 0.42% after opening at 0.40%.
In the California new-issue market Wednesday, Bank of America Merrill Lynch priced $410 million of subordinate toll bridge revenue bonds for the Bay Area Toll Authority.
The bonds mature from 2019 through 2034, with term bonds in 2042 and 2050. Yields range from 2.99% with a 3.25% coupon in 2019 to 4.95% with a 5% coupon in 2050.
The bonds, which are callable at par in 2020, are rated A1 by Moody’s and A-plus by Standard & Poor’s.
In economic data released Wednesday, demand for durable goods climbed faster than economists estimated in September, increasing 3.3% largely due to aircraft and parts orders.
Excluding transportation, durable goods orders decreased 0.8% for the month. Transportation equipment jumped 15.7% as nonmilitary aircraft and parts, a volatile monthly figure, surged by $6.6 billion, or 105%.
Economists expected gains of 1.9% for all durable goods orders and 0.4% for orders excluding transportation.
New home sales rose 6.6% to a seasonally adjusted annual rate of 307,000 in September, the highest level since June.
It was the second consecutive monthly gain. Economists expected 300,000 new home sales for the month.
Previous Session's Activity
The most actively traded security in the state yesterday was taxable Sonoma County 6s of 2029, which traded 60 times at a high of 102.000 and a low of 98.900.
