The municipal market was firmer by five to seven basis points yesterday, as the week's two largest scheduled deals were priced in the primary market.
Goldman, Sachs & Co. priced for institutional investors $745 million of electric system revenue bonds for Arizona's Salt River Project Agricultural Improvement and Power District, following a retail order period Monday. The bonds mature from 2011 through 2029, with term bonds in 2034 and 2039. Yields range from 1.56% with a 3% coupon in 2011 to 5.08% with a 5% coupon in 2039. The bonds, which are callable at par in 2019, are rated Aa1 by Moody's Investors Service and AA by Standard & Poor's.
Citi priced $650 million of building aid revenue bonds for the New York City Transitional Finance Authority. The bonds mature from 2011 through 2030, with term bonds in 2034 and 2039. Yields range from 2.05% with a 3% coupon in 2011 to 5.55% with a 5.25% coupon in 2039. The bonds, which are callable at par in 2019, are rated A1 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch Ratings.
"The day kind of followed the same pattern that a lot of days have been following lately," a trader in Los Angeles said. "A little bit firmer first thing in the morning, and then yields creep lower and lower as the day progresses on. We also had some solid weakness in the Treasury market in the morning, which turned around and finished about where we started. But the main story is that we dealt with a good amount of supply today, the overall market, and seemed to handle it pretty easily. The demand is there, at least for now. We'll see how long this continues."
The Treasury market was mixed yesterday. The yield on the benchmark 10-year Treasury note, which opened at 2.31%, finished at 2.29%. The yield on the two-year note was quoted near the end of the session at 0.74% after opening at the same level. The yield on the 30-year bond, which opened at 2.99%, was quoted near the end of the session at 3.00%.
Elsewhere in the new-issue market, Chandler, Ariz., competitively sold $252 million of general obligation bonds to Piper Jaffray & Co. with a true interest cost of 4.04%. The bonds mature from 2010 through 2028, with yields ranging from 1.68% with a 3% coupon in 2012 to 4.62% with a 4.375% coupon in 2028. Bonds maturing in 2010, 2011, 2021, 2023, and 2025 were not formally re-offered. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's and AAA by Standard & Poor's and Fitch.
Fairfax County, Va., competitively sold $199.5 million of public improvement bonds to Barclays Capital with a TIC of 3.57%. The bonds mature from 2010 through 2029, with yields ranging from 2.57% with a 4% coupon in 2017 to 4.37% with a 4.25% coupon in 2028. Bonds maturing from 2010 through 2016, in 2019, and in 2029 were not formally re-offered. The bonds, which are callable at par in 2019, are rated triple-A by all three major ratings agencies.
Guilford County, N.C., competitively sold $164.6 million of GO public improvement bonds to Wachovia Bank NA with a TIC of 3.59%. The bonds mature from 2010 through 2029, with yields ranging from 1.53% with a 5% coupon in 2012 to 4.00% priced at par in 2023. Bonds maturing in 2010 and 2011 will be decided via sealed bid. Bonds maturing in 2018, 2019, and from 2024 through 2029 were not formally re-offered. The bonds, which are callable at par in 2019, are rated Aa1 by Moody's, AAA by Standard & Poor's, and AA-plus by Fitch.
Morgan Stanley priced $157.8 million of water revenue bonds for California's San Diego Public Facilities Financing Authority, which marks the city's first venture into the municipal market in five years. The bonds mature from 2009 through 2021, with term bonds in 2026, 2029, and 2038. Yields range from 0.92% with a 3% coupon in 2009 to 5.40% with a 5.25% coupon in 2038. The bonds, which are callable at par in 2018, are rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.
JPMorgan priced for retail investors $130.2 million of project revenue bonds for the Massachusetts State College Building Authority. The bonds mature from 2010 through 2029, with term bonds in 2034, 2039, and 2049. Yields range from 1.17% with a 3% coupon in 2010 to 5.75% with a 5.7% coupon in 2039. The bonds, which are callable at par in 2019, are rated A1 by Moody's and A-plus by Standard & Poor's.
Banc of America Securities LLC priced for retail $123.2 million of subordinated revenue bonds for Florida's Jacksonville Electric Authority. The bonds mature from 2010 through 2028, with term bonds in 2033 and 2039. Yields range from 1.03% with a 3% coupon in 2010 to 5.56% with a 5.5% coupon in 2039. The bonds, which are callable at par in 2014, are rated Aa3 by Moody's, A-plus by Standard & Poor's, and AA-minus by Fitch.
RBC Capital Markets priced $108.4 million of consolidated revenue and refunding bonds for the University of Houston System. The bonds mature from 2009 to 2033, with yields ranging from 0.65% with a 3% coupon in 2009 to 5.21% with a 5% coupon in 2033. The bonds, which are callable at par in 2019, are rated Aa3 by Moody's and AA-minus by Standard & Poor's.
Finally, Morgan Stanley priced $115 million of GO bonds for Delaware. The bonds mature from 2010 through 2029, with yields ranging from 0.50% with a 4% coupon in 2010 to 4.50% priced at par in 2029. The bonds, which are callable at par in 2017, are rated triple-A by all three major credit agencies.
