The municipal market was mostly flat Thursday, though with a slightly weaker tone, amid light to moderate secondary trading activity.
“We’re definitely flat, but there might have even been a bit of a weaker tone,” a trader in San Francisco said. “It’s felt pretty firm for the last several weeks, but today is feeling a little bit weaker, even if it’s not going to be reflected in the scale.”
A Chicago trader said that secondary trading was “somewhat quiet.”
“There was some business getting done, but it wasn’t especially active,” the trader said. “I think we’re starting to slow down a bit.”
The Treasury market was somewhat mixed Thursday. The benchmark 10-year note was quoted near the end of the session at 2.99% after opening at 2.98%. The 30-year bond was quoted near the end of the session at 4.08% after opening at 4.06%. The two-year note was quoted near the end of the session at 0.59% after opening at 0.61%.
The Treasury Department auctioned $29 billion of seven-year notes, with a 2 3/8% coupon, a 2.394% high yield, a price of 99.88.
The bid-to-cover ratio was 2.78.
Tenders at the high yield were allotted 25.57%. All competitive tenders at lower yields were accepted in full.
The median yield was 2.330%. The low yield was 2.268%.
The Federal Reserve banks bought $952.3 million for their own account in exchange for maturing securities.
The Municipal Market Data triple-A scale yielded 2.57% in 10 years and 3.67% in 20 years Thursday, matching Wednesday. The scale yielded 3.97% in 30 years Thursday, also matching Wednesday.
“It’s pretty flat,” a trader in New York said. “I’m not seeing much movement so far.”
Thursday’s triple-A muni scale in 10 years was at 86.0% of comparable Treasuries and 30-year munis were at 97.5%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 105.3% of the comparable London Interbank Offered Rate.
In the new-issue market Thursday, Barclays Capital priced $190.8 million of first-priority subordinated revenue notes for California’s Turlock Irrigation District.
The notes mature in Aug. 2011, yielding 0.75% priced at par.
The credit is rated MIG-1 by Moody’s Investors Service, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch Ratings.
Oyster Bay, N.Y., competitively sold $126.3 million of public improvement bonds to Bank of America Merrill Lynch, with a net interest cost of 3.21%.
The bonds mature from 2011 through 2026, with coupons ranging from 3% to 4%. None of the bonds were formally re-offered.
The bonds, which are callable at par in 2017, are rated triple-A by Standard & Poor’s.
Bank of America priced $111.4 million of revenue bonds for the California Municipal Finance Authority.
The bonds mature from 2013 through 2026, with term bonds in 2030 and 2040. Yields range from 2.54% with a 3% coupon in 2013 to 5.83% with a 5.75% coupon in 2040.
The bonds, which are callable at par in 2020, are rated Baa1 by Moody’s and A-minus by Fitch.
Clark County, Nev., competitively sold $99.1 million of sales and excise tax revenue improvement and refunding bonds to Goldman, Sachs & Co.
The bonds mature from 2011 through 2020, with yields ranging from 0.72% with a 4% coupon in 2012 to 3.22% with a 5% coupon in 2020. Bonds maturing in 2011 were decided via sealed bid.
The bonds, which are not callable, are rated Aa2 by Moody’s and AA-plus by Standard & Poor’s.
Wells Fargo Securities priced $94.2 million of revenue bonds for the Georgia Higher Education Facilities Authority.
The bonds mature from 2012 through 2041, with yields ranging from 1.17% with a 3% coupon in 2012 to 4.81% with a 4.75% coupon in 2041.
The bonds, which are callable at par in 2020, are insured by Assured Guaranty Corp., except those bonds maturing in 2012, 2013, and 2040. The underlying credit is rated A2 by Moody’s and A-plus by Standard & Poor’s.
RBC Capital Markets priced $90.7 million of solid waste system refunding bonds for Tampa.
The bonds mature from 2011 through 2019, with yields ranging from 2.10% with a 3% coupon in 2011 to 4.33% with a 5% coupon in 2019.
The bonds, which are not callable, are rated A3 by Moody’s and A by Fitch. However, bonds maturing from 2013 through 2019 are insured by Assured Guaranty Municipal Corp.
Wells Fargo priced $43.4 million of unlimited tax refunding bonds for Montgomery County, Tex.
The bonds contain split maturities in both 2029 and 2030, yielding 4.19% with a 4% coupon and 3.94% with a 5% coupon in 2029, and 4.27% with a 4.125% coupon and 4.02% with a 5% coupon in 2030.
The bonds, which are callable at par in 2019, are insured by Ambac Assurance Corp. The underlying credit is rated Aa2 by Moody’s and AA by Standard & Poor’s.
In economic data released Thursday, initial jobless claims decreased to 457,000 in the week ending July 24, the third decline in four weeks.
Continuing claims increased to 4.565 million for the week ending July 17, up 81,000 from the previous week.
Economists expected 460,000 initial claims and 4.540 million continuing claims, according to the median estimate from Thomson Reuters.
