The municipal market was firmer yesterday. Traders said tax-exempt yields were lower by three or four basis points.
"There was a fair amount of buying out there, especially with retail customers," a trader in New York said. "We were seeing a good amount of activity all around, though, and we're doing a bit better again. Seems like it's been a while since we've had a down day, but I don't want to say that too loud. But we're a good three basis points better overall, probably as much as five or so in spots."
"Definitely another positive day," a trader in Los Angeles added. "It was pretty quiet in the beginning of the day, but activity seemed to pick up as things progressed. Treasuries had a good day, and munis just sort of followed suit. We're an easy three or four basis points better on the whole."
The Treasury market also showed gains. The yield on the benchmark 10-year Treasury note, which opened at 3.65%, finished at 3.53%. The yield on the two-year note was quoted near the end of the session at 1.13% after opening at 1.24%. The yield on the 30-year bond, which opened at 4.20%, was quoted near the end of the session at 4.13%.
In the new-issue market yesterday, JPMorgan priced for retail investors $293.7 million of bonds for the Municipal Electric Authority of Georgia in two series. Bonds from the $11.2 million Series C mature in 2019 and 2020, but were not offered in the retail order period. Bonds from the $282.5 million Series D mature from 2011 through 2023, with a term bond in 2026. Yields range from 3.15% with a 4% coupon in 2011 to 5.70% with a 5.625% coupon in 2026. Bonds maturing in from 2019 through 2023 were not offered in the retail order period. The bonds are callable at par in 2018, and are rated A2 by Moody's Investors Service, A by Standard & Poor's, and A-plus by Fitch Ratings.
JPMorgan also priced $167.1 million of higher educational facilities second program bonds for the Tennessee School Bond Authority. The bonds mature from 2009 through 2025, with term bonds in 2028, 2033, and 2038. Yields range from 1.25% with a 4% coupon in 2009 to 5.35% with a 5.5% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.
Wachovia Bank NA priced $99.9 million of revenue bonds for the Georgia Higher Education Facilities Authority. The bonds mature from 2011 through 2026, with term bonds in 2028, 2034, 2038, and 2040. Yields range from 3.16% with a 4% coupon in 2011 to 6.50% with a 6.25% coupon in 2040. Bonds maturing from 2011 through 2026 and in 2038 are insured by Assured Guaranty Corp. All remaining bonds are uninsured. The bonds, which are callable at par in 2018, are rated A2 by Moody's.
Barclays Capital priced $83.5 million of pollution control revenue bonds for the Monroe County, Ga., Development Authority. The bonds mature in 2048, yielding 1.95% priced at par. The bonds, which are not callable, are rated A2 by Moody's, A by Standard & Poor's, and A-plus by Fitch.
JPMorgan priced $68.5 million of pollution control revenue bonds for the Burke County, Ga., Development Authority. The bonds mature in 2048, yielding 4.95% priced at par. The bonds are rated A2 by Moody's, A by Standard & Poor's, and A-plus by Fitch.
Citi priced $53.9 million of lease revenue refunding bonds for the Anaheim, Calif., Public Financing Authority. The bonds mature from 2009 through 2019, with yields ranging from 1.85% with a 3% coupon in 2009 to 4.91% with a 5% coupon in 2019. The bonds, which are not callable, are rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.
The Florida Department of Management Services competitively sold $36.6 million of revenue bonds to UBS Financial Services with a true interest cost of 5.44%. The bonds mature from 2010 through 2036, with a term bond in 2038. Yields range from 2.33% with a 3.5% coupon in 2010 to 5.80% with a 5.75% coupon in 2038. The bonds are callable at 101 in 2018, declining to par in 2019. The credit is rated Aa2 by Moody's, AA-plus by Standard & Poor's, and AA by Fitch.
Worcester County, Md., competitively sold $35 million of public improvement bonds to UBS with a TIC of 4.00%. The bonds mature from 2009 through 2023, with yields ranging from 2.10% with a 3.5% coupon in 2010 to 4.60% with a 4.5% coupon in 2023. Bonds maturing in 2009 were decided via sealed bid. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's and AA-minus by Fitch.
The St. Paul Independent School District No. 625 competitively sold $25.8 million of general obligation bonds to UBS with a TIC of 4.62%. The bonds mature from 2010 through 2027, with a term bond in 2029. Coupons range from 3% in 2010 to 5% in 2029. None of the bonds were formally re-offered. The credit is rated Aa2 by Moody's and AAA by Standard & Poor's.
Hingham, Mass., competitively sold $22.9 million of GO bond anticipation notes to Citi with a net interest cost of 1.14%. The Bans mature in November 2009, yielding 2.50%, priced at par. The credit is rated MIG-1 by Moody's.
In economic data released yesterday, the producer price index dropped 2.8% in October after a 0.4% decline the previous month. Economists polled by Thomson Reuters had predicted a 1.8% decline.
The PPI core rose 0.4% in October, after a 0.4% uptick the previous month. Economists polled by Thomson had predicted a 0.1% rise.
Later this week, more economic data will be released. Today, the October consumer price index, October housing starts, and building permits will be released. Tomorrow, initial jobless claims for the week ended Nov. 15 will be released, along with continuing jobless claims for the week ended Nov. 8, and the October index of leading economic indicators.
Economists polled by Thomson are predicting a 0.7% drop in CPI, a 0.1% uptick in core CPI, 780,000 housing starts, and 780,000 building permits, 505,000 initial jobless claims, and 3.920 million continuing jobless claims.
