The municipal market was mostly unchanged yesterday as some of the week’s largest deals were priced in the primary.
“We’re mostly flat at this point,” a trader in New York said. “We’re maybe a basis point or so better in the belly of the curve, but there’s just not a lot of movement. There is some trading going on here and there, but it’s not especially active.”
“It’s been somewhat quiet on the Street,” a trader in Los Angeles said. “If you want to get something done, you can, but there’s just doesn’t seem to be a lot of motivation to do so out there.”
In the new-issue market yesterday, William Blair & Co. priced $700 million of taxable general obligation Build America Bonds for Illinois.
The bonds mature from 2011 through 2022, with a term bond in 2035. Full pricing information was not available by press time, but the bonds were priced to yield between 112 and 215 basis points over the comparable Treasury yield, and feature a make-whole call at Treasuries plus 25 basis points.
Proceeds from the sale will be used to provide grants to school districts for construction and repair of public school facilities.
The BABs are rated Aa3 by Moody’s Investors Service with a negative outlook, in a rating that was recalibrated upwards Monday. They are rated A-plus with a negative watch by Standard & Poor’s and Fitch Ratings.
M.R. Beal & Co. priced $642.4 million of taxable and tax-exempt debt for Connecticut in three series, including $184.3 million of taxable BABs.
The BABs mature from 2019 through 2026. Full pricing information was not available, but the bonds were priced to yield between 60 and 145 basis points over the comparable Treasury yield. Bonds maturing prior to 2020 are subject to a make-whole call at Treasuries plus 25 basis points. Bonds maturing in 2020 or after are callable at par in 2020.
Bonds from the $353.1 million series of GO bond anticipation notes mature in 2011, yielding 0.45% with a 2% coupon. The notes are rated MIG-1 by Moody’s, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch.
Bonds from the $105 million tax-exempt series of GO debt mature from 2015 through 2018, with yields ranging from 1.93% with a 2.5% coupon in 2015 to 2.66% with a 5% coupon in 2017. Bonds maturing in 2018 were not formally re-offered. The bonds are not callable.
The long-term debt is now rated Aa2 by Moody’s, up from Aa3, AA by Standard & Poor’s, and AA-plus by Fitch.
The Treasury market showed some losses yesterday. The benchmark 10-year note was quoted near the end of the session with a yield of 3.80% after opening at 3.76%. The yield on the two-year finished at 1.02% after opening at 0.96%. The yield on the 30-year bond finished at 4.68% after opening at 4.67%.
The Municipal Market Data triple-A scale yielded 3.01% in 10 years and 3.84% in 20 years yesterday, compared with Monday’s levels of 3.02% and 3.84%. The scale yielded 4.14% in 30 years yesterday, down a tick from 4.15% Monday.
Yesterday’s triple-A muni scale in 10 years was at 79.5% of comparable Treasuries and 30-year munis were at 88.5%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 92.4% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market yesterday, Raymond James & Co. priced $185.4 million of revenue anticipation certificates for Georgia’s DeKalb County Hospital Authority.
The debt matures from 2011 through 2015, with term bonds in 2020, 2030, and 2040. Yields range from 2.29% with a 3.5% coupon in 2011 to 6.35% with a 6.125% coupon in 2040.
The bonds, which are callable at par in 2020, are rated BBB by Fitch.
Morgan Stanley priced $68.6 million of port facilities revenue refunding bonds for the Virginia Port Authority.
The bonds mature from 2016 through 2025, with term bonds in 2030 and 2040. Yields range from 2.85% with a 4% coupon in 2016 to 4.75% with a 5% coupon in 2040.
The bonds, which are callable at par in 2019, are rated Aa3 by Moody’s and A-plus by Standard & Poor’s.
Bank of America Merrill Lynch priced $43.1 million of revenue bonds for Pennsylvania’s Delaware County Authority.
The bonds mature from 2021 through 2030, with term bonds in 2035 and 2040. Yields range from 3.54% with a 5% coupon in 2021 to 4.43% with a 5% coupon in 2040.
The bonds, which are callable at par in 2020, are rated Aa2 by Moody’s and AA by Standard & Poor’s.
Trades reported by the Municipal Securities Rulemaking Board yesterday were flat to slightly firmer. A dealer sold to a customer California 5.25s of 2038 at 4.82%, even with where they were sold Monday.
A dealer sold to a customer taxable Municipal Electric Authority of Georgia BABs 6.64s of 2057 at 6.46%, even with where they traded Monday.
Bonds from an interdealer trade of Claiborne County, Tenn., 4s of 2027 yielded 4.15%, even with where they were sold yesterday. A dealer sold to a customer taxable Portsmouth, Va., BABs 6.28s of 2040 at 6.10%, down one basis point from where they traded Monday.
A dealer bought from a customer New York City Municipal Water Finance Authority 4.5s of 2039 at 4.58%, even with where they traded Monday. Bonds from an interdealer trade of Golden State Tobacco Securitization Corp. 5.75s of 2047 yielded 7.89%, one basis point lower than where they were sold Monday.
A dealer bought from a customer Tennessee’s Johnson County Health and Education Facilities Board 5.38s of 2025 at 5.59%, even with where they were sold Monday. Bonds from an interdealer trade of Michigan’s taxable Chippewa Valley Schools BABs 6.85s of 2035 yielded 6.68%, even with where they traded Monday.
Bonds from an interdealer trade of Arizona’s Scottsdale Municipal Property Corp. 4s of 2029 yielded 4.25%, one basis point lower than where they traded Monday. A dealer sold to a customer New York City Industrial Development Agency 6.5s of 2035 at 6.53%, down one basis point from where they were sold Monday.
The economic calendar was light yesterday.
