The municipal market was mostly unchanged Monday amid lethargic secondary trading activity.
“We’re pretty flat,” a trader in New York said. “It’s a bit of a quiet start to the week. There isn’t a whole lot of movement just yet.”
The Municipal Market Data triple-A 10-year scale was flat Monday at 3.31%, the 20-year scale remained unchanged at 4.56%, and the scale for 30-year bonds held at 4.78%.
Monday’s triple-A muni scale in 10 years was at 97.9% of comparable Treasuries and 30-year munis were at 104.4% according to MMD. Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 112.5% of the comparable London Interbank Offered Rate.
Treasuries showed some losses Monday. The benchmark 10-year note finished at 3.39% after opening at 3.32%. The 30-year bond finished at 4.58% after opening at 4.53%. The two-year note finished at 0.57% after opening at 0.54%.
With a $1.1 billion Chicago airport deal postponed, the New York City Transitional Finance Authority and North Carolina are set to offer two of the largest deals in a lackluster week as February starts with an estimated $3.02 billion of volume, according to Ipreo LLC and The Bond Buyer.
In the new-issue market Monday, Goldman, Sachs & Co. priced for retail investors $775 million of future tax secured bonds for the New York City TFA. Another day of retail marketing follows Tuesday before institutional pricing Wednesday.
The bonds mature from 2013 through 2031, with a term bond in 2035. Yields range from 0.82% with a 2.5% coupon in 2013 to 5.15% with a 5.125% coupon in 2035. Bonds maturing in 2022, 2024, 2025, and from 2027 through 2030 were not offered to retail investors.
The bonds, which are callable at par in 2021, are rated Aa1 by Moody’s Investors Service and AAA by Standard & Poor’s and Fitch Ratings.
North Carolina leads the competitive market this week with $500 million of Series 2011 capital-improvement limited obligation bonds.
Rated Aa1 by Moody’s and AA-plus by Fitch, the bonds are structured to mature from 2012 to 2031.
This week’s primary market will be relatively sparse now that Chicago has decided to pull its $1.1 billion offering for O’Hare International Airport due to legal entanglements. The city is fighting a lawsuit filed by the airport’s two largest carriers challenging its authority to finish work on an $8 billion expansion.
The deal was originally slated to price Wednesday after a retail order period Tuesday, but remain pending until the litigation is resolved, according to market participants.
Citi is the book-running senior manager and Siebert Brandford Shank & Co. is co-senior. The deal includes a mix of securities, some backed solely by passenger facility charges and others by both PFCs and federal grants.
The muni market showed no tangible reaction to a Wall Street Journal article over the weekend indicating that states are increasing their focus on marketing tax-exempt debt to retail investors.
“No one’s really talking about it,” a trader in Los Angeles said. “But it’s definitely something we’ve been seeing out here for quite some time, and it seems like it’s picking up some steam elsewhere in the country.”