NEW YORK - The municipal market was weaker by about three basis points Thursday amid moderate secondary trading activity.
"We gave up another couple basis points today," a trader in Los Angeles said. "I think we were just playing catch-up a little bit after the Treasury sell-off yesterday. There was a bit of a slowdown in the secondary, though still a decent amount of activity out there."
The Municipal Market Data triple-A scale yielded 2.83% in 10 years Thursday, three basis points higher than Wednesday's 2.80%, while the 20-year scale yielded 4.00%, also up three basis points. The scale for 30-year debt rose three basis points as well, to 4.34% from 4.31%.
"We're a little bit weaker," a trader in New York said. "We're really just picking up from where we left off yesterday. I'd say we're down about two or three basis points right now."
Thursday's triple-A muni scale in 10 years was at 94.6% of comparable Treasuries and 30-year munis were at 101.9%, according to MMD. Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 108.5% of the comparable London Interbank Offered Rate.
The Treasury market was weaker Thursday. The benchmark 10-year note was quoted recently at 3.01% after opening at 2.96%. The 30-year bond was quoted recently at 4.27%, after opening at 4.24%. The two-year note was quoted recently at 0.55% after opening at 0.53%.
In the new-issue market Thursday, Bank of America Merrill Lynch priced $346.4 million of taxable and tax-exempt debt for Honolulu in two series, including $151.1 million of taxable Build America Bonds.
The BABs mature from 2015 through 2035, with yields ranging from 2.776% in 2015, or 1.80% after the 35% federal subsidy, to 6.478% in 2035, or 4.21% after the subsidy, all priced at par.
The bonds were priced to yield between 85 and 250 basis points over the corresponding Treasury yields, and are callable at par in 202, except bonds maturing from 2026 through 2030, which contain an unspecified make-whole call.
Bonds from the $195.3 million series of tax-exempt GO bonds mature from 2015 through 2035, with yields ranging from 1.61% with a 5% coupon in 2015 to 4.85% with a 4.75% coupon in 2035. These bonds are callable at par in 2020
The bonds are rated Aa1 by Moody's Investors Service and AA-plus by Fitch Ratings.
Citi priced $342.6 million of taxable BABs for the District of Columbia. The BABs mature in 2022, 2023, 2026, and 2035. Full pricing information was not available by press time.
The bonds were priced to yield between 105 and 195 basis points over the corresponding Treasury yields and contain an unspecified make-whole call.
The credit is rated Aa1 by Moody's, AAA by Standard & Poor's, and AA-plus by Fitch.
Wells Fargo Securities priced $332.3 million of taxable and tax-exempt debt for Ohio's American Municipal Power Inc. in four series.
Bonds from the $43.3 million series of traditional taxable bonds mature from 2016 through 2021, with yields ranging from 4.442% in 2016 to 5.672% in 2021, all priced at par.
The bonds were priced to yield between 210 and 270 basis points over the corresponding Treasury yields, and contain an unspecified make-whole call.
Bonds from the $260 million series of taxable BABs mature in 2035 and 2050, yielding 7.00% and 7.499% priced at par, or 4.55% and 4.87% after the 35% federal subsidy.
The bonds were priced to yield 325 basis points over the 30-year Treasury yield and contain an unspecified make-whole call.
Bonds from the $20 million series of taxable new clean renewable energy bonds mature in 2028, yielding 6.849% priced at par.
The bonds were priced to yield 260 basis points over the 30-year Treasury yield..
Bonds from the $9 million tax-exempt series mature in 2021, yielding 4.29% with a 5% coupon. These bonds are not callable.
The credit is rated A3 by Moody's and A by both Standard & Poor's and Fitch.
JPMorgan priced $273.6 million of debt for the Massachusetts Bay Transportation Authority in two series, including $210 million of taxable BABs.
The BABs mature in 2021, 2031, and 2040, yielding 4.546%, 5.769%, and 5.869%, or 2.95%, 3.75%, and 3.81% after the 35% federal subsidy, all priced at par.
The bonds were priced to yield 160, 155, and 165 basis points over the corresponding Treasury yields, respectively, and contain a make-whole call at Treasuries plus 25 basis points.
The deal also contains $63.6 million of senior sales tax bonds, which mature from 2018 through 2020, yielding 2.51%, 2.78%, and 3.00%, all with 5% coupons. These bonds are not callable.
The credit is rated Aa1 by Moody's and AAA by Standard & Poor's.
Morgan Stanley priced $155 million of taxable BABs for Texas' Katy Independent School District. The BABs mature from 2022 through 2025, with term bonds in 2030, 2033, and 2041. Yields range from 4.538% in 2022, or 2.95% after the 35% federal subsidy, to 6.349% in 2041, or 4.13% after the subsidy.
The bonds were priced to yield between 155 and 230 basis points over the corresponding Treasury yields. They are callable at par in 2020, except bonds maturing prior to 2020, which contain a make-whole call at Treasuries plus 30 basis points.
The debt is backed by the Permanent School Fund guarantee program. The underlying credit is rated Aa2 by Moody's and AA by Standard & Poor's.
In economic data released Thursday, initial jobless claims increased more than economists estimated the week ending Nov. 27 as they jumped by 26,000 new filings to 436,000.
Continuing claims increased by 53,000 to 4.270 million for the week ending Nov. 20 to post their first gain in six weeks.
Economists expected 428,000 claims and 4.230 million continuing claims.
Pending home sales surged 10.4% to a level of 89.3 in October from 80.9 in September, according to an index released Thursday by the National Association of Realtors.
Economists predicted an 80.1 reading for the gauge of contract signings to purchase new homes.
Visible Supply
The Bond Buyer's 30-day visible supply fell $2.348 billion to $14.529 billion. The total is comprised of $2.669 billion in competitive bonds and $11.860 billion in negotiated bonds.
Previous Session's Activity
The Municipal Securities Rulemaking Board reported 52,806 trades of 16,990 issues for total volume traded of $17.65 billion on Wednesday. The most actively traded bond was Oklahoma's Grand River Dam Authority 5.25s of 2040, which traded 366 times at a high of 104.642 and a low of 101.642.
