The municipal bond market started the year off on a strong, but slow note. Traders said prices of high-quality bonds were up in thin action on Friday.
Secondary Market
The yield on the benchmark 10-year general obligation dropped on Friday as much as two basis points from 2.04% on Wednesday, while the yield on 30-year GOs declined as much as two basis points from to 2.86%, according to a preliminary read of MMD's triple-A scale.
Treasury prices were little changed on Friday, with the two-year note yield falling to 0.66% on Friday from 0.67% on Wednesday. The 10-year yield decreased to 2.14% from 2.18% on Wednesday, while the 30-year yield dropped to 2.68% from 2.74%.
On Wednesday, the 10-year muni to Treasury ratio was at 93.6% versus 94.1% on Tuesday, while the 30-year muni to Treasury ratio was at 103.6% compared to 104.3% on Tuesday.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 13,660 trades on Wednesday on volume of $3.033 billion. Most active on Wednesday, 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 59 times with an average price of 100.977 and an average yield of 4.119%.
Primary Market
Looking ahead to next week, the primary market warms up and takes on a definite Southern tone.
Miami-Dade County, Fla., will put out for bid on Tuesday, three separate competitive sales of general obligation and GO refunding bonds totaling about $372 million. Proceeds from the sales will be used for public health, parks and the "Building Better Communities" program. The issues are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's.
Also in the competitive arena, Shelby County, Tenn., will offer $172.665 million GO refunding bonds, Series 1015A on Thursday. The bonds are rated Aa2 by Moody's and AA-plus by S&P and Fitch Ratings.
In the negotiated sector, Citigroup Global Markets will price the Oregon state Department of Administrative Services' $412 million lottery revenue bonds on Thursday. The bonds are rated Aa2 by Moody's and triple-A by S&P.
And Citigroup will price the Broward County, Fla., School Board's $273 million certificates of participation on Wednesday. The COPs are rated A1 by Moody's, A by S&P and A-plus by Fitch.
