The municipal market was unchanged with a slightly firmer tone Monday amid fairly light secondary trading activity.
"There are some bits and pieces trading, but the secondary is pretty quiet on the whole," a trader in Los Angeles said. "You can maybe pick up a basis point here and there depending on what you're trading, but there just isn't a lot of interest. The week is off to a slow start."
The Municipal Market Data triple-A scale yielded 2.81% in 10 years Monday, down two basis points from Friday's 2.83%, while the 20-year scale was unchanged at a 4.02% yield. The scale for 30-year debt was also unchanged, at 4.36%.
Monday's triple-A muni scale in 10 years was at 95.6% of comparable Treasuries and 30-year munis were at 102.6%, according to MMD. Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 110.1% of the comparable London Interbank Offered Rate.
The Treasury market was stronger Monday. The benchmark 10-year note finished at 2.94% after opening at 3.00%; the 30-year bond closed at 4.25%, after opening at 4.32%; and the two-year note finished at 0.45% after opening at 0.47%.
In the wake of November's hefty volume and the sell-off it helped precipitate, the market is poised for an estimated $12.11 billion of supply this week as issuers continue to race the clock against the impending expiration of the Build America Bonds program, according to Ipreo LLC and The Bond Buyer. The program is set to expire Dec. 31, though Congress is mulling an extension.
The market absorbed a revised $9.13 billion of new issues last week, according to Thomson Reuters.
This week's activity features another mammoth sale — $1.5 billion of New Jersey Turnpike Authority revenue bonds structured as BABs. It is part of an estimated $10.49 billion in negotiated offerings slated for pricing this week, according to Ipreo and The Bond Buyer.
The deal is rated A3 by Moody's Investors Service, A-plus by Standard & Poor's, and A by Fitch Ratings. It's expected to be priced by Goldman, Sachs & Co.
In the new-issue market Monday, Citi priced for retail investors $122 million of refunding revenue bonds for the Dormitory Authority of the State of New York. The bonds mature from 2011 through 2013, and in 2015, 2016, 2019, and 2020. Yields range from 0.96% with a 3% coupon in 2012 to 3.52% with a 5% coupon in 2020. Bonds maturing in 2011 will be decided via sealed bid. The bonds, which are not callable, are rated Aa3 by Moody's and AA-minus by Fitch.
JPMorgan priced for retail investors $223.7 million of airport revenue refunding bonds for the Wayne County, Mich., Airport Authority in two series. Bonds from the $195.9 million Series C mature from 2011 through 2023, with yields ranging from 1.70% with a 5% coupon in 2012 to 4.90% with a 5% coupon in 2023. Bonds maturing in 2011 will be decided via sealed bid. The bonds are callable at par in 2020.
Bonds from the $27.7 million Series D mature from 2011 through 2021, with yields ranging from 1.70% with a 2% coupon in 2012 to 4.57% with a 4.5% coupon in 2021. Bonds maturing in 2011 will be decided via sealed bid. The bonds are callable at par in 2020. The credit is rated A2 by Moody's, A by Standard & Poor's, and A-minus by Fitch.