The municipal market was unchanged to slightly firmer yesterday. Traders said tax-exempt yields were flat to lower by one or two basis points in spots.
“There’s not a lot of movement right now, but I think we’re leaning a bit toward the firmer side,” a trader in New York said. “You could call it unchanged and really not be wrong, but I do think there are little pockets of firmness out there, and if you’ve got the right paper, you can pick up maybe even two or three basis points.”
“We’re a bit better again,” a trader in San Francisco said. “We’ve been seeing pretty steady gains all week, and they’ve been just about across the board. The market just feels pretty firm.”
The Treasury showed some gains yesterday. The yield on the benchmark 10-year note, which opened at 3.42%, finished at 3.38%. The yield on the two-year note was quoted near the end of the session at 0.95% after opening at 0.96%. The yield on the 30-year bond, which opened at 4.20%, was quoted near the end of the session at 4.17%.
Yesterday, the Municipal Market Data triple-A scale yielded 2.61% in 10 years and 3.54% in 20 years, extending their record lows, following yields on Wednesday of 2.65% and 3.61% , respectively.
As of Wednesday’s close, the triple-A muni scale in 10 years was at 74.6% of comparable Treasuries, according to MMD, while 30-year munis were 93.9% of comparable Treasuries. Thirty-year triple-A general obligation bonds were at 97.8% of the comparable London Interbank Offered Rate as of Wednesday’s close.
In the new-issue market yesterday, JPMorgan priced $217.1 million of general receipts bonds for Ohio’s Kent State University. The bonds mature from 2010 through 2031, with yields ranging from 1.22% with a 2% coupon in 2011 to 4.35% with a 4.25% coupon in 2031.
Bonds maturing in 2010 were decided via sealed bid. The bonds, which are callable at par in 2019, are insured by Assured Guaranty Corp., except those maturing in 2010 and 2011, which are uninsured. The underlying credit is rated A1 by Moody’s Investors Service and A-plus by Standard & Poor’s.
Raymond James & Co. priced $52 million of multifamily revenue bonds for the New Jersey Housing and Mortgage Finance Agency in three series. Bonds from the $30.5 million Series A mature from 2011 through 2019, with term bonds in 2029 and 2041. Yields range from 1.95% in 2011 to 4.95% in 2041, all priced at par.
Bonds from the $4.1 million Series B mature in 2029 and 2039, yielding 4.70% and 4.90%, respectively, both priced at par. Bonds from the $17.3 million Series C mature in 2012, yielding 2.55% priced at par. Series A and B bonds are callable at par in 2019, while Series C bonds are callable at par in 2020. The credit is rated A-plus by Standard & Poor’s.
Wachovia Bank NA priced $51.1 million of refunding revenue bonds for California’s Semitropic Improvement District. The bonds mature from 2010 through 2026, with term bonds in 2029, 2034, and 2038.
Yields range from 0.62% with a 2.5% coupon in 2010 to 4.54% with a 5% coupon in 2038. The bonds, which are callable at par in 2019, are rated AA-minus by Standard & Poor’s.
JPMorgan priced $50 million of fixed-rate taxable multifamily housing revenue bonds for the New York City Housing Development Corp. The bonds mature in 2024 and 2039 and were not formally re-offered. The bonds were priced to yield 225 basis points over the comparable Treasury yields. The bonds, which are callable at par in 2019, are rated Aa2 by Moody’s and AA by Standard & Poor’s.
First Southwest Co. priced $40.5 million of bonds for Pearland, Tex., in two series. Bonds from the $12.1 million series of certificates of obligation mature from 2011 through 2029, with yields ranging from 0.98% with a 2% coupon in 2011 to 4.29% with a 4.2% coupon in 2029.
Bonds from the $28.4 million series of permanent improvement and refunding bonds mature from 2010 through 2029, with a term bond in 2034.
Yields range from 0.98% with a 2% coupon in 2011 to 4.44% with a 5% coupon in 2034. Bonds maturing in 2010 will be decided via sealed bid. The bonds, which are callable at par in 2019, are rated AA-minus by Standard & Poor’s and Fitch Ratings.
RBC Capital Markets priced $28 million of GOs for California’s El Monte City School District, including $18.5 million of taxable Build America Bonds. The BABs mature in 2029 and 2034, yielding 6.85% with a 7.125% coupon and 6.95% priced at par, respectively, or 4.63% and 4.52%, respectively, after the 35% federal subsidy. The bonds were priced to yield 265 and 275 basis points over the comparable Treasury yield, respectively.
The $9.5 million tax-exempt series matures from 2010 through 2024, with yields ranging from 0.57% with a 4% coupon in 2010 to 4.01% with a 4.75% coupon in 2024. All the bonds are callable at par in 2019 and insured by Assured. The underlying credit is rated A2 by Moody’s and A-plus by Standard & Poor’s.
In economic data released yesterday, initial jobless claims for the week ended Sept. 19 came in at 530,000, after a revised 551,000 the previous week. Economists polled by Thomson Reuters had predicted 550,000 initial jobless claims.