Tax-exempts were unchanged with a weaker tone Friday in quiet trading, as participants mostly sat on the sidelines ahead of a three-day holiday weekend."It's pretty quiet and flat right now, maybe a bit of a weaker tone," a trader in New York said. "It's the Friday before a holiday weekend, so it's not unexpected. But it seems like everyone is just ready for the weekend."
"There is a bit of weakness out there, but it's quiet," a trader in Los Angeles said. "I wouldn't say there's very much activity at all. You could maybe say we are weaker a basis point or two, but I'd call it unchanged, just because there's, to me, not enough activity out there to move the scale. But there's certainly a bit of a weaker tone."
Trades reported by the Municipal Securities Rulemaking Board Friday showed little movement. Bonds from an interdealer trade of Louisiana Public Facilities Authority 5.5s of 2027 yielded 3.99%, even with where they traded Thursday. A dealer bought from a customer Ohio's Buckeye Tobacco Settlement Finance Authority 5.875s of 2047 at 9.03%, even with where they were sold Thursday. A dealer sold to a customer California 5.75s of 2031 at 5.44%, up one basis point from where they were sold Thursday.
A dealer sold to a customer Compton, Calif., 6s of 2039 at 6.10%, even with where they traded Thursday. A dealer sold to a customer insured Indiana Municipal Power Agency 5s of 2037 at 5.14%, even with where they were sold Thursday. A dealer sold to a customer Tennessee Energy Acquisition Corp. 5.25s of 2026 at 6.58%, up one basis point from where they traded Thursday.
The Treasury market showed some losses Friday. The yield on the benchmark 10-year note, which opened at 3.37%, was quoted near the end of the session at 3.46%. The yield on the two-year note was quoted near the end of the session at 0.90% after opening at 0.86%. The yield on the 30-year bond, which opened at 4.31%, was quoted near the end of the session at 4.39%.
As of Thursday's close, the triple-A muni scale in 10 years was at 83.0% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 101.2% of comparable Treasuries. Also, as of the close Thursday, 30-year tax-exempt triple-A general obligation bonds were at 110.7% of the comparable London Interbank Offered Rate.
Activity in the new-issue market was light Friday. However, this week, the primary market will be led by a $425.6 million New York State Thruway Authority sale of state personal income tax revenue bonds for transportation purposes. The deal is slated to be priced tomorrow by RBC Capital Markets. The credit is rated AAA by Standard & Poor's and AA-minus by Fitch Ratings.
Also, the New Jersey Transportation Trust Fund Authority will come to market Thursday with a $350 million sale of Build America Bonds, to be priced by Merrill Lynch & Co. The bonds are rated A1 by Moody's Investors Service, AA-minus by Standard & Poor's and A-plus by Fitch.
The economic calendar was light Friday.
