The municipal market was slightly firmer yesterday, following the Treasury market.
“It feels a little bit better in line with Treasuries, but I’m still not seeing a ton of activity,” a trader in Chicago said. “We’re probably up about one to three basis points. There’s some pockets of cash, and people are interested in high-grade paper, but it’s still pretty quiet.”
Trades reported by the Municipal Securities Rulemaking Board yesterday showed gains. A dealer sold to a customer California 5.25s of 2036 at 5.24%, down two basis points from where they were sold Wednesday. Bonds from an interdealer trade of Puerto Rico Electric Power Authority 5s of 2025 sold at 5.17%, down one basis point from where they traded Wednesday. A dealer sold to a customer New York City Municipal Water Finance Authority 5s of 2036 at 5.00%, three basis points lower than where they were sold Wednesday. A dealer bought from a customer Port Authority of New York and New Jersey 5s of 2038 at 4.91%, down there basis points from where they traded Wednesday.
“We’re definitely a little better, that’s for sure,” a trader in New York added. “Treasuries have got a nice little rally going after the weak jobs report, and we’re pretty much following suit from that. I’d say we’re better a good two or three basis points.”
The Treasury market showed gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 4.06%, finished at 3.91%. The yield on the two-year note was quoted near the end of the session at 2.42% after opening at 2.57%. The yield on the 30-year Treasury was quoted near the end of the session at 4.55% after opening at 4.69%.
In economic data released yesterday, initial jobless claims for the week ended Aug. 2 came in at 455,000, after 448,000 the previous week. Economists polled by IFR Markets had predicted 430,000 initial jobless claims.
Continuing jobless claims for the week ended July 26 came in at 3.311 million, after a revised 3.280 million the previous week. Economists polled by IFR had predicted 3.225 million continuing jobless claims.
The pending home sales index increased to a reading of 89.0 in June from a downwardly revised 84.5 in May. IFR Markets’ poll of economists had predicted an 84.3 reading. The May reading was initially reported as 84.7.
In the new-issue market yesterday, First Southwest Co. priced $75 million of limited-tax general obligation bonds for Texas’s San Jacinto Community College District in two series. Bonds from the larger $74.9 million series of current interest bonds mature from 2009 through 2028, with term bonds in 2033 and 2038.
Yields range from 2.25% with a 3.25% coupon in 2010 to 5.23% with a 5.125% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s. The deal also contains a $5,000 series of premium capital appreciation bonds, which mature in 2010.
The Board of Education of the Borough of Glen Rock, N.J., competitively sold $45.3 million of school bonds to UBS Securities LLC, with a net interest cost of 4.55%. The bonds mature from 2010 through 2033. None of the bonds were formally re-offered. The bonds, which are callable at par in 2018, are rated Aa2 by Moody’s.
The Iowa Board of Regents competitively sold $26 million of recreational facilities revenue bonds to Wachovia Bank NA with a true interest cost 4.59%. The bonds mature from 2010 through 2018, with term bonds in 2020, 2022, 2026, 2028, 2030, and 2034. Yields range from 2.15% with a 3% coupon in 2010 to 4.80% with a 4.75% coupon in 2034. The bonds, which are callable at par in 2019, are rated Aa2 by Moody’s.
Bowling Green, Ky., competitively sold $24.8 million of GO public project bonds to Robert W. Baird & Co. The bonds mature from 2010 through 2018, with term bonds in 2020, 2022, 2024, 2026, 2028, 2032, and 2038. Yields range from 2.28% with a 3.5% coupon in 2010 to 5.05% with a 5% coupon in 2038. The bonds, which are callable at par in 2018, are rated Aa3 by Moody’s.
The South County Central School District at Brookhaven, N.Y., competitively sold $23 million of tax anicipation notes to various bidders. Depfa First Albany Securities LLC won the largest chunk of the deal, worth $18 million, with a net interest cost of 2.28%. The Tans mature in June 2009, yielding 2.25%, priced at par.
Finally, the Union Free School District of the Tarrytowns, N.Y., competitively sold $20.8 million of bond anticipation notes to Commerce Capital Markets with a NIC of 1.70%. The Bans mature in Aug. 2009, yielding 2.25% priced at par.