The municipal market was unchanged to slightly firmer yesterday.
"You can see some gains, at least inside of 15 years or so, but there's not really much movement beyond that," a trader in New York said. "I still wouldn't say you're better by more than two basis points. But Treasuries are doing well, and munis are following a bit."
"It's still pretty quiet, but there's definitely a firmer tone," a trader in Los Angeles said. "I'd still call it mostly unchanged, but you could call it better by one or two basis points and not be out of line."
The Treasury market showed gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.53%, finished at 3.36%. The yield on the two-year note was quoted near the end of the session at 1.07% after opening at 1.13%. The yield on the 30-year bond, which opened at 4.12%, was quoted near the end of the session at 3.95%.
In the new-issue market yesterday, JPMorgan priced for retail investors $523 million of power supply revenue bonds for the California Department of Water Resources in four series. Bonds from the $150 million series F-3 have split maturities in 2020 and 2021. Maturities in 2020 yield 4.75% priced at par and 4.75% with a 5% coupon while the 2021 maturities yield 4.90% priced at par, and 4.90% with a 5% coupon. The bonds are callable at par in 2018. Bonds from the $200 million series F-5 mature in 2022, yielding 5.00%, and priced at par. The bonds are also callable at par in 2018.
Bonds from the $98 million series G-4 have a split maturity in 2016, and yield 3.875% priced at par and 3.875% with a 4.25% coupon. The bonds are not callable. Bonds from the $75 million series G-11 have a split maturity in 2018, yielding 4.30% priced at par and 4.30% with a 4.5% coupon. The bonds are also not callable. The credit is rated Aa3 by Moody's Investors Service and A-plus by both Standard & Poor's and Fitch Ratings.
Merrill Lynch & Co. priced $425 million of bonds tax-exempt and taxable bonds for New York City in two series. During the two-day retail order period, which concluded Tuesday, the city received $381 million of retail orders, according to a press release. Bonds from the larger $400 million tax-exempt series mature from 2010 through 2026, with term bonds in 2028 and 2031.
Yields range from 2.60% with a 3% coupon in 2010 to 5.70% with a 5.625% coupon in 2031. The deal also contains a $25 million taxable series, which matures in 2014 and 2015. The bonds are rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.
JPMorgan priced $350 million of bonds for the Municipal Electric Authority of Georgia in two series. Bonds from the $11 million Series C mature in 2019 and 2020, yielding 5.12% with a 5.5% coupon and 5.33% with a 5.25% coupon, respectively. Bonds from the $339 million Series D mature from 2011 through 2020, with term bonds in 2023 and 2026. Yields range from 3.15% with a 4% coupon in 2011 to 5.80% with a 5.5% coupon in 2026. All bonds are callable at par in 2018.
Seattle competitively sold $215.8 million of water system improvement and refunding revenue bonds to Merrill Lynch with a true interest cost of 4.99%. The bonds mature from 2009 through 2029, with term bonds in 2033 and 2038. Yields range from 2.51% with a 4% coupon in 2011 to 5.45% with a 5.25% coupon in 2038. Bonds maturing in 2009, 2010, from 2012 through 2020, in 2022, and in 2025 were not formally re-offered. The bonds, which are callable at par in 2018, are rated Aa2 by Moody's and AA-plus by Standard & Poor's.
Siebert, Brandford, Shank & Co. priced $175 million of capital grant receipts revenue bonds for the Chicago Transit Authority. The bonds mature from 2010 through 2026, with yields ranging from 2.92% with a 5% coupon in 2010 to 5.50% with a 6% coupon in 2026. Bonds maturing from 2021 through 2026 are insured by Assured Guaranty Corp. All other bonds are uninsured. The bonds are callable at par in 2018. The underlying credit is rated A2 by Moody's and A by Standard & Poor's and Fitch.
In economic data released yesterday, the consumer priced index dipped 1.0% in October, after no change the previous month. Economists polled by Thomson Reuters had predicted a 0.7% decline.
The CPI core dropped 0.1% in October after a 0.1% uptick the previous month. Economists polled by Thomson had predicted a 0.1% rise.
Housing starts came in at 791,000 in October after a revised 828,000 the previous month. Economists polled by Thomson had predicted 780,000 housing starts.
Building permits came in at 708,000 in October after a revised 805,000 the prior month. Economists polled by Thomson Reuters had predicted 780,000 building permits.
Today, more economic data will be released. Initial jobless claims for the week ended Nov. 15 will be released, along with continuing jobless claims for the week ended Nov. 8, and the October index of leading economic indicators.
Economists polled by Thomson are predicting 505,000 initial jobless claims, 3.920 million continuing jobless claims, and a 0.6% drop in LEI.