The municipal market was slightly weaker yesterday.
"It's probably two basis points weaker as you go out on the scale, maybe only a basis point in shorter paper. But there's definitely weakness," a trader in Los Angeles said. "We're just following along with Treasuries."
The Treasury market showed losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.68%, finished at 3.73%. The yield on the two-year note was quoted near the end of the session at 2.10%, after opening at 1.96%.
"It's fairly quiet, but we're a little bit weaker," a trader in New York said. "I'd say we're down a basis point or two. But there's not much trading."
In economic data released yesterday, initial jobless claims for the week ended April 12 came in at 372,000, after a revised 355,000 the previous week. Economists polled by IFR Markets had predicted 375,000 initial jobless claims.
Continuing jobless claims for the week ended April 5 came in at 2.984 million, after a revised 2.958 million the previous week. Economists polled by IFR had predicted 2.930 million continuing jobless claims.
The composite index of leading economic indicators rose 0.1% in March. LEI decreased an unrevised 0.3% in February. It now stands at 102.0. Economists polled by IFR predicted LEI would be up 0.2% in the month.
Manufacturing activity in the Federal Reserve Bank of Philadelphia's region "continued to weaken this month," as the general business conditions index declined to negative 24.9 in April from negative 17.4 in March. Economists surveyed by IFR Markets predicted a reading of negative 15.0 for the index.
In the new-issue market yesterday, Illinois competitively sold $1.2 billion of general obligation certificates in two series. A $900 million series, which matures next month, was sold to Citi with a true interest cost of 2.15%. The notes yield 2.13% with a 3% coupon. A $300 million series, which matures in June, was sold to Lehman Brothers with a TIC of 2.51%. The notes yield 2.49% with a 3% coupon. The credit is rated MIG-1 by Moody's Investors Service, SP-1-plus by Standard & Poor's, and F1-plus by Fitch Ratings.
Morgan Stanley priced $577.4 million of airport system revenue bonds for Sacramento County in multiple series. Bonds from a $167.4 million series of bonds not subject to the alternative minimum tax mature from 2008 through 2028, with term bonds in 2032 and 2041. Yields range from 2.42% with a 2.375% coupon in 2010 to 4.98% with a 5% coupon in 2041. Bonds maturing in 2008 and 2009 were decided via sealed bid. The bonds are callable at par in 2018.
Bonds from a $310.4 million series of bonds subject to the AMT mature in 2008, 2009, 2013, 2018, 2024, 2028, 2033, and 2039. Yields range from 4.25% priced at par in 2013 to 5.41% with a 5.25% coupon in 2039. Bonds maturing in 2008 and 2009 were decided via sealed bid. The bonds are callable at par in 2018.
Bonds from a $12.5 million series of taxable bonds mature in 2012, and are not callable. Bonds from a $43.7 million series of non-AMT bonds mature from 2008 through 2026, with yields ranging from 2.42% with a 2.375% coupon in 2010 to 4.66% with a 5% coupon in 2026. Bonds maturing in 2008 and 2009 were decided via sealed bid. The bonds are callable par in 2018. Bonds from a $43.3 million series of bonds subject to the AMT mature from 2008 through 2010, and in 2013, 2018, and 2024. Yields range from 4.25% priced at par in 2013 to 5.12% with a 5.75% coupon in 2024. Bonds maturing from 2008 through 2010 were decided via sealed bid. These bonds are callable at par in 2018.
All bonds are insured by Financial Security Assurance Inc., except bonds in all series maturing from 2008 through 2010, which are uninsured. The underlying credit is rated A1 by Moody's and A-plus by Standard & Poor's.
JPMorgan priced $250 million of variable-rate bonds for the Colorado Health Facilities Authority in four series. Bonds from the $60 million series C-1 mature in 2041, yielding 5.10%, priced at par. Bonds from the $60 million series C-3 mature in 2041, yielding 5.10% priced at par. Bonds from the $65 million series C-5 mature from 2016 through 2025, with a term bond in 2036. Yields range from 3.85% in 2016 to 5.00% in 2036, all priced at par. And, bonds from the $65 million series C-7 mature from 2016 through 2025, with a term bond in 2036. Yields range from 3.85% in 2016 to 5.00% in 2036, all priced at par. All bonds are callable at par in 2018, and are insured by FSA. The underlying credit is rated Aa2 by Moody's and AA by both Standard & Poor's and Fitch.
Citi priced $245.8 million of tax-exempt and taxable turnpike subordinate revenue bonds for the Pennsylvania Turnpike Commission in two series. Bonds from a $177.5 million series of tax-exempt bonds mature from 2022 through 2029, with term bonds in 2033 and 2038. Yields range from 4.18% with a 4.125% coupon in 2022 to 4.72% with a 5% coupon in 2038. Bonds from a $68.3 million series of taxable bonds mature from 2009 through 2015, with term bonds in 2018 and 2022. All the bonds are insured by Assured Guaranty Corp. The underlying credit is rated A2 by Moody's and A-minus by Standard & Poor's.
The Rialto, Calif., Redevelopment Agency competitively sold $52.3 million of taxable tax allocation housing set-aside bonds to Griffin, Kubik, Stephens & Thompson Inc. with a TIC of 7.72%. Bonds from the $30 million series one mature from 2008 through 2018, with term bonds in 2023, 2028, and 2037. Bonds from the $22.3 million series two mature from 2008 through 2018, with term bonds in 2023, 2028, and 2037. The bonds are insured by Ambac Assurance Corp.
Irving, Tex., competitively sold $32.7 million of GOs for RBC Capital Markets, with a TIC of 4.15%. The bonds mature from 2010 through 2029, with yields ranging from 2.32% with a 3.5% coupon in 2010 to 4.70% with a 4.5% coupon in 2029. The bonds, which are callable at par in 2018, are rated triple-A by both Moody's and Standard & Poor's.
