NEW YORK – The municipal market was slightly firmer Friday amid fairly light secondary trading activity as the New Jersey Economic Development Authority came to market with $808.7 million of debt.
“We’re better a few basis points,” a trader in Los Angeles said. “The activity was somewhat light, and we were fairly flat in the morning, but by the end of the day, we picked up a good two, three, maybe even four basis points throughout the curve.”
The Municipal Market Data triple-A 10-year scale fell four basis points Friday to 3.34%, the 20-year dropped four basis points to 4.57%, and the scale for 30-year bonds declined four basis point to 4.90%.
In the new-issue market Friday, Bank of America Merrill Lynch priced $808.7 million of school facilities construction refunding bonds for the New Jersey EDA.
Bonds from the $498.1 million tax-exempt Series GG mature from 2013 through 2027, with yields ranging from 2.10% with a 3% coupon in 2013 to 5.55% with a 5.25% coupon in 2027. The bonds are callable at par in 2021.
The $265.6 million Series E SIFMA index notes mature in 2016 and 2018, and were priced to yield 170 and 190 basis points over the SIFMA index. Bonds maturing in 2016 are callable at par in 2015. Bonds maturing in 2018 are callable at par in 2017.
The $45 million Series F Libor index notes mature in 2018 and were priced to yield 70% of Libor plus 190 basis points. The bonds are callable at par in 2017.
The credit is rated Aa3 by Moody’s Investors Service, A-plus by Standard & Poor’s, and AA-minus by Fitch Ratings.
Friday’s triple-A muni scale in 10 years was at 91.5% of comparable Treasuries and 30-year munis were at 104.0% according to MMD. Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 109.5% of the comparable London Interbank Offered Rate.
Treasuries mostly showed gains Friday. The benchmark 10-year note was quoted recently at 3.65% after opening at 3.69%. The 30-year bond was quoted recently at 4.71% after opening at 4.75%. The two-year note was quoted recently at 0.85% after opening at 0.83%.
In economic data released Friday, the University of Michigan's preliminary February consumer sentiment index reading was 75.1, compared to the final January 74.2 reading. Economists polled by Thomson Reuters had predicted a 75.0 reading for the index.
Visible Supply
The Bond Buyer's 30-day visible supply rose $3.842 billion to $11.208 billion. The total is comprised of $1.761 billion of competitive bonds and $9.447 billion of negotiated bonds.
Previous Session's Activity
The Municipal Securities Rulemaking Board reported there were 52,282 trades of 18,464 issues for a volume of $13.33 billion. Most active was insured Kentucky Municipal Power Agency 5.25s of 2042 that traded 163 times at a high of 99.911 and a low of 95.302.
