NEW YORK – The tax-exempt market is slightly higher in Monday morning trading, following Treasuries, as the failure of the federal “super committee” to come up with $1.2 trillion in cuts forces investors into safe haven assets.
“There is very little going on,” said a trader in New York. “It’s very quiet. And it’s going to be very quiet for the holiday week.”
He added the news of the super committee’s failure to come to an agreement has not impacted the market much as of yet. “The biggest surprise would be if they actually got something done.”
Munis were slightly higher in Monday morning trading. Outside the eight-year spot, yields were two basis points lower.
On Friday, the two-year muni closed flat at 0.42% for its 13th consecutive trading session. The 10-year fell three basis points to 2.26% and the 30-year fell two basis points to 3.77%.
Treasuries rallied Monday morning with the 10- and 30-year falling below 2% and 3%, respectively. The benchmark 10-year fell five basis points to 1.96% while the 30-year dropped six basis points to 2.94%. The two-year was steady at 0.29%.
In the primary market, RBC Capital Markets is expected to price for institutions $295 million of California Public Works Board lease revenue bonds. The bonds are rated Aa2 by Moody’s Investors Service, AA-minus by Standard & Poor’s and AA by Fitch Ratings. Retail pricing took place Friday. Pricing information was not available by press time.
Loop Capital Markets is expected to begin a second day of retail orders for $200 million of University of Connecticut general obligation bonds. The credit is rated Aa2 by Moody’s, AA by Standard & Poor’s and AA-minus by Fitch.
On Friday, Loop Capital priced the deal for retail. Yields ranged from 0.2% with a 1.5% coupon in 2012 to 3.33% with 3.75% and 5% coupons in a 2026 split maturity. Portions of credits maturing in 2012 and credits maturing in 2031 were not formally re-offered.
Wells Fargo is expected to price for retail $175.7 million of Westchester County Health Care Corp. revenue bonds. The bonds are rated A3 by Moody’s and BBB by Standard & Poor’s.
RBC is expected to price $146.8 million of Colorado building excellent schools certificates of participation. The bonds are rated Aa2 by Moody’s and AA-minus by Standard & Poor’s.
In economic news, existing home sales rose 1.4% in October to a seasonally adjusted 4.97 million-unit rate from a revised 4.90 million unit rate in September, according to the National Association of Realtors.
