NEW YORK – The tax-exempt market is starting out slow on this shortened week as last week’s whiplash is having a hang-over effect on the market.
“It’s early on a Monday and you’re not seeing much of anything,” said a trader in Dallas. “It’s a difficult Monday morning and it is quiet coming into the chute.”
The trader added that with the shortened week due to the Veterans Day holiday on Friday, most deals will come in the front-end of the week. “The vast majority is getting into the market by Wednesday,” he said.
The Municipal Market Data scale had yet to be updated by press time. On Friday, tax-exempt yields ended flat across the board. The two-year yield closed at 0.42%, the 10-year yield ended the week at 2.30%, and the 30-year yield finished at 3.71%.
The Treasury market took small moves in the short end in Monday morning trading. The two- and 10-year Treasury yields were up one basis point each at 0.24% and 2.05%. The 30-year was steady at 3.10%.
In the primary market this week, new issuance isn’t expected to hit last week’s $8.75 billion, but is still substantial at $7.79 billion. The negotiated calendar is expected to see $5.79 billion while the competitive market should see $2 billion.
Morgan Keegan is expected to price $150 million Huntsville, Ala., general obligation school capital improvement warrants in two pricings. The bonds are rated Aaa by Moody’s Investors Service and AAA by Standard & Poor’s.
The first pricing includes $100.2 million of bonds maturing between 2012 and 2031. The second pricing includes $49.3 million of credits maturing between 2016 and 2033.
In the competitive market, triple-A rated Lake County Forest Preserve District in Illinois is expected to auction $25 million general obligation bonds.
