The municipal market was slightly weaker yesterday, following the Treasury market, which experienced a correction after Monday’s sizeable gains. Traders said that while some shorter maturities were unchanged, the overall market is off about one basis point. “Certainly the shorter part of the curve is still competitively priced, but there’s obviously a lot of volatility in the Treasury market,” a trader in San Francisco said. “I think though from the first point drop, munis hung in, as there was still interest from [Monday’s] levels. Then all of a sudden, it just began to wane and we saw that bid fade, and it hasn’t come back into the market.” The Treasury market showed losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.85%, finished at 3.96%. The yield on the two-year note was quoted near the end of the session at 3.10%, after opening at 2.88%. In economic data released yesterday, the consumer confidence index dropped to 87.3 in November from a downwardly revised 95.2 in October. Economists polled by IFR Markets predicted the index would slip to 90.5. In the new-issue market, UBS Securities LLC priced for retail investors portions of its $1 billion California general obligation offering, which will have institutional pricing tomorrow. The bonds mature from 2011 through 2019, with term bonds in 2023, 2027, and 2033. Yields range from 3.44% with a 4% coupon in 2011 to par with a 4.875% coupon in 2033. The bonds are callable at par in 2017. Moody’s Investors Service rates the bonds A1, while Standard & Poor’s and Fitch Ratings both assign an A-plus. JPMorgan priced for retail investors $354.2 million of pool program bonds for the triple-A rated Massachusetts Water Pollution Abatement Trust. The bonds mature from 2008 through 2028, with term bonds in 2027. Yields range from 3.17% with a 4% coupon in 2009 to 4.42% with a 4.375% coupon in 2027. Bonds maturing in 2008 were not formally reoffered. The bonds are callable at par in 2017. The Florida State Board of Education competitively sold $250 million of public education outlay bonds to Banc of America Securities LLC, with a true interest cost of 4.52%. The bonds mature from 2008 through 2032, with a term bond in 2037. Bonds maturing in 2008 have a coupon of 4%, while all others have a 5% coupon. The bonds were not formally reoffered. The bonds are callable at par in 2017, and rated Aa1 by Moody’s, AAA by Standard & Poor’s, and AA-plus by Fitch. Citi priced $225.7 million of general improvement and refunding bonds for San Antonio in two series. Bonds in the larger series — worth $119.4 million — mature in 2008 through 2028. Yields range from 3.30% with a 4% coupon in 2009 to 4.44% with a 5% coupon in 2028. Bonds in the smaller series — worth $106.4 million — also mature in 2008 through 2028. Yields range from 3.30% with a 4% coupon in 2009 to 4.65% with a 4.5% coupon in 2028. Bonds maturing in 2008 were priced via sealed bid for both series. The bonds are callable at par in 2017. Moody’s rates the bonds Aa1 and Standard & Poor’s and Fitch rate them AA-plus. Loop Capital Markets LLC priced $238.7 million of unlimited-tax GO bonds for the Chicago Board of Education. The bonds mature from 2008 through 2029, with yields ranging from 3.35% with a 4% coupon in 2009 to 4.48% with a 5% coupon in 2029. Bonds maturing in 2008 were not formally reoffered. All remaining bonds are insured by Financial Security Assurance Inc. Moody’s rates the underlying credit A1, Standard & Poor’s rates it AA-minus, and Fitch rates it A-plus. California also competitively sold $91.2 million of GO bonds to Lehman Brothers with a TIC of 5.05%. The bonds mature from 2028 through 2032, with term bonds in 2042. Yields range from 4.95% in 2028 to 5.10% in 2042, all priced at par. The bonds, which are callable at par in 2042, are rated A1 by Moody’s, AA-minus by Standard & Poor’s, and A-plus by Fitch. UBS also priced $97.7 million of state revolving fund program bonds for the triple-A rated Indiana Finance Authority. The bonds mature from 2010 through 2028, with yields ranging from 3.30% with a 4% coupon in 2010 to 4.41% with a 5% coupon in 2028. The bonds are callable at par in 2018. The rest of the week will see a full slate of economic news that could affect pricing. Today, the October durable goods report, both including and excluding transportation, will be released, along with October existing home sales. Tomorrow, the preliminary gross domestic product for the third quarter will be released, followed by initial jobless claims for the week ending Nov. 24, continuing jobless claims for the week ending Nov. 17, and October new home sale. On Friday, October personal income and consumption, the October core personal consumption expenditures deflator, the November Chicago purchasing managers’ index, and October construction spending will be released. Economists polled by IFR are predicting a 0.3% rise in durable goods orders, a 0.4% gain in durable goods excluding autos, 4.95 million existing home sales, a reading of 4.5% for preliminary GDP, 0.8% for the GDP price index, 330,000 initial claims, 2.600 million continuing claims, and 753,000 new home sales. In addition, IFR economists are expecting a 0.4% level for personal income, 0.1% for the PCE, 1.8% for the core PCE deflator, a reading of 49.7 for the Chicago PMI index, and a drop of 0.3% in construction spending.
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