The municipal market was three to five basis points firmer yesterday as several of the week's largest new-issue transactions came to market, traders said.
"We're a bit more active today, and we're firmer," a trader in New York said. "There's definitely a positive tone out there. We were a little better yesterday, and we're kind of picking up from there now. We're probably better a solid three basis points now, maybe even a little more out on the really long end."
In the new-issue market yesterday, Barclays Capital priced $381.6 million of taxable and tax-exempt bonds for the Virginia College Building Authority in three series. Bonds from the $283.9 million tax-exempt Series A mature from 2010 through 2029, with yields ranging from 1.25% with a 3% coupon in 2011 to 4.81% with a 5% coupon in 2029. Bonds maturing in 2010 will be decided via sealed bid. The bonds are callable at par in 2019. Bonds from the $12.9 million tax-exempt Series C mature from 2010 through 2015, with yields ranging from 0.75% with a 3% coupon in 2010 to 2.67% with a 4% coupon in 2015. The bonds are not callable. The deal also contains the $84.8 million taxable Series B, which matures from 2010 through 2014 and in 2018. The credit is rated Aa1 by Moody's Investors Service and AA-plus by both Standard & Poor's and Fitch Ratings.
JPMorgan priced $305 million of revenue bonds for the Dormitory Authority of the State of New York. The bonds mature from 2012 through 2029, with term bonds in 2034 and 2039. Yields range from 1.48% with a 3% coupon in 2012 to 5.08% with a 5% coupon in 2039. The bonds, which are callable at par in 2019, are rated Aa1 by Moody's and AA by Standard & Poor's.
Raymond James & Co. priced $300 million of assessment revenue bonds for the Louisiana Citizens Property Insurance Corp. in four $75 million subseries. Bonds from Subseries C-1 mature from 2012 through 2026, with yields ranging from 3.57% with a 3.125% coupon in 2012 to 6.43% with a 6.25% coupon in 2026. The bonds are callable at par in 2018. Bonds from Subseries C-2 mature in 2026, yielding 6.35% with a 6.75% coupon. They are callable at par in 2018.
Bonds from Subseries C-3 mature in 2025, yielding 6.33% with a 6.125% coupon. They are callable at par in 2018. Bonds from Subseries C-4 mature in 2009, 2010, 2011, and 2024, yielding 2.75% priced at par in 2009, 2.75% with a 3% coupon in 2010, 3.30% with a 3% coupon in 2011, and 6.34% with a 6.125% coupon in 2024. The bonds are callable at par in 2013. All the bonds are insured by Assured Guaranty Corp. The underlying credit is rated Baa2 by Moody's and A-minus by Standard & Poor's.
The Treasury market showed some gains yesterday. The yield on the benchmark 10-year note, which opened at 2.71%, was quoted near the end of the session at 2.69%. The yield on the two-year note was quoted near the end of the session at 0.81% after opening at 0.84%. The yield on the 30-year bond, which opened at 3.60%, was quoted near the end of the session at 3.55%.
As of Monday's close, the muni triple-A scale in 10 years was at 117.6% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 134.2% of comparable Treasuries. Also, as of the close Monday, 30-year tax-exempt triple-A rated general obligation bonds were at 148.2% of the comparable London Interbank Offered Rate.
