Amid a smattering of new issues, the municipal market finished yesterday's session slightly firmer in light to moderate trading activity.Traders said tax-exempt yields were lower by one or two basis points.
"We're feeling a little bit firmer," a trader in New York said. "I'd say we're better a good basis point or two. There's been a firmer tone the last couple days, but not enough activity to really move the scale, but I think we're clearly a bit better yesterday."
"We're seeing some retail interest, and there's some business getting done in that market," a trader in San Francisco said. "I'm not sure really how much that carried over to the overall market, but we are a bit better. We're probably better a good basis point or two."
The Treasury market showed some losses yesterday. The yield on the benchmark 10-year note, which opened at 3.47%, was quoted near the end of the session at 3.53%.
The yield on the two-year note was quoted near the end of the session at 1.12% after opening at 1.09%.
The yield on the 30-year bond, which opened at 4.29%, was quoted near the end of the session at 4.33%.
As of Monday's close, the triple-A muni scale in 10 years was at 92.8% of comparable Treasuries, according to Municipal Market Data.
Additionally, 30-year munis were 108.6% of comparable Treasuries. Also, as of the close, 30-year tax-exempt triple-A general obligation bonds were at 113.3% of the comparable London Interbank Offered Rate.
In the new-issue market yesterday, market sources indicated that a $235.7 million Orange County, Calif., deal, being sold on behalf of John Wayne Airport to finance the addition of terminal space, six new gates, and parking facilities, was priced by Citi. No further information was available by press time.
The fixed-rate, senior-lien bonds were said to be structured to mature from 2010 to 2019 with term bonds in 2024, 2029, and 2039, and are rated Aa3 by Moody's Investors Service and AA-minus by Fitch Ratings.
The deal will also sport a new upgrade from Standard & Poor's to AA-minus from A-plus, which was announced two weeks ago in advance of the sale.
The Pennsylvania Higher Educational Facilities Authority competitively sold $123.6 million of revenue bonds to Merrill Lynch & Co. with a true interest cost of 4.37%.
The bonds mature from 2010 through 2031, with term bonds in 2034 and 2039. Yields range from 3.21% with a 5% coupon in 2016 to 4.01% with a 5% coupon in 2020.
Bonds maturing from 2010 through 2015 and from 2021 through 2039 were not formally re-offered. The bonds, which are callable at par in 2019, are rated Aa3 by Moody's and AA-minus by Fitch.
Merrill also priced $91.5 million of certificates of participation for Ventura County, Calif.
The bonds mature from 2010 through 2029, with yields ranging from 1.37% with a 4% coupon in 2010 to 5.96% with a 5.75% coupon in 2029. The bonds, which are callable at par in 2019, are rated A1 by Moody's and AA by Standard & Poor's.
Jefferies & Co. priced $58 million of water facilities revenue bonds for the Pennsylvania Economic Development Financing Authority. The bonds mature in 2039, yielding 5.23% with a 5% coupon. The bonds, which are callable at par in 2019, are rated AA-minus by Standard & Poor's.
Wachovia Bank NA priced $41.8 million of revenue refunding bonds for Georgia's Private Colleges and Universities Authority.
The bonds mature from 2010 through 2025, with yields ranging from 0.88% with a 4% coupon in 2010 to 4.55% with a 4.375% coupon in 2025. The bonds, which are callable at par in 2019, are rated AA by Standard & Poor's and Fitch.
JPMorgan priced $25 million of mortgage purchase bonds for the Maine State Housing Authority in two series. Bonds from the $9.6 million Series A-1 mature from 2011 through 2014, with yields ranging from 1.85% in 2011 to 3.10% in 2014, all priced at par.
Bonds from the $15.4 million Series A-2 mature from 2015 through 2019, with a term bond in 2024, with yields ranging from 3.40% in 2015 to 4.90% in 2024, all priced at par. The bonds, which are callable at par in 2019, are rated Aa1 by Moody's and AA-plus by Standard & Poor's.
In economic data released yesterday, the consumer confidence index, which had improved considerably in May, retreated in June. The index now stands at 49.3, down from 54.8 in May. Economists polled by Thomson Reuters had predicted a 55.0 reading.
The Chicago Purchasing Managers' Business Barometer rose to 39.9 in June from 34.9 in May. Economists polled by Thomson predicted a 39.0 reading.