The municipal market was unchanged to slightly weaker yesterday, amid light to moderate secondary trading activity, and as New York City came to market with approximately $750 million of total issuance.
“There are some bits and pieces trading, but we’re fairly flat,” a trader in New York said. “There’s been a bit of a weaker tone hanging around for most of this week, and it’s still there. So we’re maybe down a basis point here and there, but overall, I’d just call it unchanged.”
“There’s a bit of weakness, mostly on the shorter end of the curve,” a Los Angeles trader said. “The long end is pretty well flat, but inside of 10, maybe 15 years, we’re about a basis point or two cheaper.”
In the new-issue market yesterday, Siebert Brandford Shank & Co. priced $675 million of bonds, including $644 million of taxable Build America Bonds for New York City.
Yields on the BABs range from 4.52% in 2018, or 2.94% after the 35% federal subsidy, to 5.97% in 2036, or 3.88% after the subsidy.
Besides the BAB piece, New York City also competitively sold $31 million of tax-exempt debt and $75 million of traditional taxable bonds at a fixed rate. The taxable bonds were sold to Wells Fargo Securities, with a true interest cost of 2.83%.
The bonds mature from 2012 through 2016, with yields ranging from 1.65% in 2012 to 3.50% in 2016, all priced at par.
The bonds are rated Aa3 by Moody’s Investors Service, AA by Standard & Poor’s, and AA-minus by Fitch Ratings.
The Treasury market showed some losses yesterday. The benchmark 10-year note finished at 3.67% after opening at 3.64%. The yield on the two-year finished at 0.97% after opening at 0.92%. The yield on the 30-year bond finished at 4.59% after opening at 4.57%.
The Municipal Market Data triple-A scale yielded 2.84% in 10 years and 3.78% in 20 years yesterday, following Wednesday’s levels of 2.83% and 3.78%. The scale yielded 4.15% in 30 years yesterday, matching Wednesday’s level.
Wednesday’s triple-A muni scale in 10 years was at 77.7% of comparable Treasuries and 30-year munis were at 90.8%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 94.5% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market yesterday, Wells Fargo priced $97.6 million of refunding certificates of participation for the Hillsborough County, Fla., School District.
The bonds mature from 2011 through 2025, with yields ranging from 0.85% with a 3% coupon in 2011 to 4.34% with a 5% coupon in 2025.
The bonds, which are callable at par in 2020, are rated Aa3 by Moody’s and AA-minus by both Standard & Poor’s and Fitch.
Boston competitively sold $66.1 million of GOs to JPMorgan, with a TIC of 2.64%.
The bonds mature from 2011 through 2023. None of the bonds were formally re-offered. These bonds were not callable.
Boston also competitively sold $40 million of GOs to Bank of America Merrill Lynch, with a TIC of 2.07%.
The bonds mature from 2011 through 2030, with yields ranging from 0.62% with a 3% coupon in 2012 to 3.88% with a 3.75% coupon in 2030. Bonds maturing in 2011, 2019, and 2020 were not formally re-offered. These bonds are callable at par in 2020.
The credit is rated Aa1 by Moody’s and AA-plus by Standard & Poor’s.
Pricing information was released on Wednesday’s $435.6 million San Francisco Airport Commission deal, which was priced by JPMorgan in two series.
Bonds from the $345.7 million Series C mature from 2014 through 2027, with yields ranging from 1.58% with a 5% coupon in 2014 to 4.42% with a 4.25% coupon in 2027.
Bonds maturing in 2014 and 2015 are insured by Assured Guaranty Municipal Corp. The remaining bonds were uninsured.
Bonds from the $89.9 million Series D mature from 2014 through 2027, with yields ranging from 1.58% with a 3% coupon in 2014 to 4.32% with a 4.125% coupon in 2027.
All bonds except those maturing in 2016, 2018, 2022, and 2023 are insured by AGM.
All bonds are callable at par in 2020. The underlying credit is rated A1 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch.
In economic data released yesterday, the consumer price index was unchanged in February. Core prices, excluding food and energy costs, increased 0.1%.
Economists expected CPI and core CPI to each rise 0.1% in February, according to the median estimate from Thomson Reuters.
Initial jobless claims decreased to 457,000 for the week ending March 13. Economists had expected 455,000 initial claims, according to the median estimate from Thomson Reuters.
Initial claims for the week ended March 6 were unrevised at 462,000 and continuing claims were revised higher to 4.567 million from 4.558 million in the week ended
The composite index of leading economic indicators gained 0.1% in February. LEI increased an unrevised 0.3% in January.
Economists polled by Thomson Reuters predicted LEI would be up 0.1%.