The municipal market was slightly firmer Wednesday amid light to moderate secondary trading activity, as Miami-Dade County priced $505 million of tax-exempt debt and a late Treasury rally left long-term muni yields higher than long Treasuries.
“We’re a little bit better,” a trader in New York said. “We’re probably better a basis point or so, depending on what you’re trading and where on the curve you’re talking. But we’re feeling a bit stronger.”
A Los Angeles trader said activity began to pick up Tuesday, with a great number of investors “taking a lot of bonds out of the market,” which helped push yields lower Tuesday, continuing into Wednesday.
“The front end of the muni curve continued to grind down to lower yields yesterday,” the trader said.
In the new-issue market Wednesday, JPMorgan priced $504.9 million of aviation revenue bonds for Miami-Dadey.
The bonds mature from 2013 through 2030, with term bonds in 2035 and 2041.
Yields range from 1.68% with a 2.25% coupon in 2013 to 5.22% with a 5% coupon in 2041. The bonds are callable at par in 2020.
Bonds maturing from 2019 through 2025 and in 2030 and 2035 were insured by Assured Guaranty Municipal Corp.
The underlying credit is rated A2 by Moody’s Investors Service, A-minus by Standard & Poor’s, and A by Fitch Ratings.
The Treasury market showed gains Wednesday. The benchmark 10-year note finished at 2.87% after opening at 2.95%. The 30-year bond finished at 3.88% after opening at 3.98%. The two-year note finished at 0.57% after opening at 0.58%.
The Municipal Market Data triple-A scale yielded 2.57% in 10 years and 3.67% in 20 years Wednesday, compared to levels of 2.58% and 3.68% Tuesday. The scale yielded 3.97% in 30 years Wednesday for the second straight day.
Wednesday’s triple-A muni scale in 10 years was at 89.9% of comparable Treasuries and 30-year munis were at 102.6%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 108.8% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market, the Port Authority of New York and New Jersey competitively sold $400 million of consolidated bonds to Citi.
The bonds mature from 2017 through 2032, with term bonds in 2035, 2039, and 2040. Yields range from 2.30% with a 3% coupon in 2018 to 4.35% with a 4.25% coupon in 2040.
Bonds maturing in 2017 were not formally re-offered.
The bonds, which are callable at par in 2020, are rated Aa2 by Moody’s and AA-minus by Standard & Poor’s and Fitch.
Bank of America Merrill Lynch priced $285 million of tax and revenue anticipation notes for Philadelphia.
The Trans mature in June 2011, yielding 0.70% with a 2% coupon.
The credit is rated MIG-1 by Moody’s and SP-1-plus by Standard & Poor’s.
JPMorgan priced $250 million of taxable electric revenue bonds for the Sacramento Municipal Utility District.
The bonds mature in 2036 and were priced to yield 225 basis points over the 30-year Treasury.
The bonds, which contain an unspecified make-whole call, are rated A1 by Moody’s, A-plus by Standard & Poor’s, and A by Fitch.
The Rector and Visitors of the University of Virginia competitively sold $190 million of taxable Build America Bonds to Wells Fargo Securities with a true interest cost of 3.20%.
The BABs mature in 2040, yielding 4.90% with a 5% coupon, or 3.19% after the 35% federal subsidy.
The bonds are rated triple-A by all three major rating agencies.
Siebert Brandford Shank & Co. priced $156.7 million of unlimited-tax refunding bonds for the Dallas Independent School District.
The bonds mature from 2011 through 2021, with yields ranging from 0.40% with a 3% coupon in 2012 to 2.89% with a 4.25% coupon in 2021. Bonds maturing in 2011 were not formally re-offered.
The bonds, which are callable at par in 2020, are backed by the Texas Permanent School Fund guarantee program. The underlying credit is rated Aa2 by Moody’s, A-plus by Standard & Poor’s, and AA by Fitch.
Raymond James & Co. priced for retail investors $130.9 million of housing finance bonds for the West Virginia Housing Development Fund in three series.
Bonds from the $76.1 million Series A, which are subject to the alternative minimum tax, mature from 2011 through 2022, with a term bond in 2027.
Yields range from 1.30% in 2011 to 5.00% in 2027, all priced at par. The bonds are callable at par in 2019.
Bonds from the $19.8 million Series B, which are not subject to the AMT, mature from 2013 through 2017, with yields ranging from 1.50% in 2013 to 2.75% in 2017, all priced at par. Call features on the series were not specified.
Bonds from the $35.0 million Series C, which are not subject to the AMT, mature in 2030, 2035, and 2040, yielding 4.45% priced at par in 2030. Bonds maturing in 2035 and 2040 were not offered to retail investors. The bonds are callable at par in 2019.
The credit is rated triple-A by Moody’s and Standard & Poor’s.
Finally, Harrisonburg, Va., competitively sold $33.8 million of debt to Davenport & Co. with a TIC of 3.00%.
The bonds mature from 2011 through 2030 with a term bond in 2034. Yields range from 0.41% with a 2% coupon in 2012 to 3.83% with a 3.75% coupon in 2030.
Bonds maturing in 2034 were not formally re-offered. Bonds maturing in 2011 were decided via sealed bid.
The bonds, which are callable at par in 2020, are rated Aa2 by Moody’s and AA-minus by Standard & Poor’s.
Priti Patnaik contributed to this column.
