The municipal market was mostly unchanged with a slightly firmer tone Friday.
“There are pockets of firmness out there, mostly in the intermediate range,” a trader in New York said. “We’re maybe a basis point or so better in spots, but on the whole it’s pretty much an unchanged day. There is some business getting done, but not a whole lot of movement out there.”
The Treasury market was mixed Friday. The yield on the benchmark 10-year note opened at 3.45% and finished at 3.43%. The yield on the two-year note opened at 0.81% and finished at 0.82%. The yield on the 30-year bond finished at 4.39%, after opening at 4.40%.
Friday’s Municipal Market Data triple-A scale yielded 2.95% in 10 years and 3.82% in 20 years, after levels of 2.96% and 3.82%, respectively, on Thursday. The scale yielded 4.26% in 30 years Friday, matching Thursday’s level of 4.26%.
As of Thursday’s close, the triple-A muni scale in 10 years was at 85.3% of comparable Treasuries, according to MMD, while 30-year munis were 96.8% of comparable Treasuries. Also, as of Thursday’s close, 30-year tax-exempt triple-A rated general obligation bonds were at 100.9% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board Friday were unchanged to slightly firmer. Bonds from an interdealer trade of Puerto Rico 5.25s of 2026 yielded 5.63%, even with where they traded Thursday.
A dealer sold to a customer New Jersey Economic Development Authority 5.5s of 2024 at 4.23%, one basis point lower than where they were sold Thursday.
Bonds from an interdealer trade of taxable North Texas Municipal Water District Build America 6s of 2029 yielded 6.00%, even with where they were sold Thursday. Bonds from an interdealer trade of Massachusetts 5.25s of 2022 yielded 3.52%, one basis point lower than where they traded Thursday.
Connecticut Treasurer Denise Nappier announced Friday that the state’s $1 billion general obligation bond issue from earlier this week, consisting mostly of economic recovery notes, will save the state $40 million over the next five years beginning in 2012. Due to greater-than-expected retail and institutional investor demand, the state increased the size of the bond transaction from $600 million to $1.08 billion.
“Investors’ reaction to our sale was more than we had expected,” Nappier said in a press release.