The municipal bond market was ending the year on a strong note. On Wednesday, the market has an early close ahead of the full close on Thursday for the New Year's holiday. Full-day trading will resume on Friday.
Tuesday's Primary Market
In the primary market on Tuesday, Bank of America Merrill Lynch priced a $233.63 million composite remarketing deal for three issuers. The offering consisted of: the California Municipal Finance Authority's $127.045 million Non-AMT solid waste refunding revenue bonds, Series 2010; the Mission Economic Development Corp. of Texas' $56.2 million Non-AMT solid waste disposal revenue bonds, Allied Waste North America, Inc., project, Series 2008A; and the Pennsylvania Economic Development Financing Authority's $35 million AMT solid waste refunding revenue bonds, Republic Services, Inc., project, Series 2010A and its $15.385 million Non-AMT solid waste refunding revenue bonds, Republic Services, Inc., project, Series 2010B.
The issue is rated BBB-plus/A-2 by Standard & Poor's.
Secondary Market
High-grade municipal bond prices were higher again on Wednesday. The yield on the benchmark 10-year general obligation dropped as much as two basis points from 2.06% on Tuesday, while the yield on 30-year GOs declined as much as two basis points from to 2.88%, according to a preliminary read of MMD's triple-A scale.
Treasury prices moved higher, with the two-year note yield falling to 0.67% on Tuesday from 0.69% on Tuesday. The 10-year yield decreased to 2.17% from 2.19% while the 30-year dropped to 2.75% from 2.76% on Tuesday.
On Tuesday, the 10-year muni to Treasury ratio was at 94.1% versus 93.4% on Monday, while the 30-year muni to Treasury ratio was at 104.3% compared to 104.9% on Monday.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 25,469 trades on Tuesday on volume of $3.272 billion.
Most active on Tuesday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bonds, Series AA 4 1/4s of 2044, which traded 161 times with an average price of 100.931 and an average yield of 4.12%.
