The municipal market was largely unchanged yesterday, but with a slightly firmer tone.
"It's somewhat quiet. We're getting a few hits on the short end, but not much more than that," a trader in New York said. "I don't think anyone is really marking their bonds, but it's not exactly going cheaper either. I'd say we're about flat."
"There's a firmer tone, but not a lot of business," a trader in Los Angeles added. "It's hard for me to get with this marketplace, only from the standpoint that it seems to be two-sided. I don't get it. It never seems like I'm doing any business, yet business is getting done out there. Most of the [traders] I've talked to don't seem to be doing any business either. There's always some going on, but this week it's like they flipped a switch and said, 'We're not buying this week.' It's kind of weird."
The Treasury market showed some gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.93%, finished at 3.89%. The yield on the two-year note was quoted near the end of the session at 2.43% after opening at 2.47%. The yield on the 30-year Treasury finished at 4.52% after opening at 4.56%.
In economic data released yesterday, the consumer price index rose 0.8% in July, after a 1.1% gain the previous month. Economists polled by IFR Markets had predicted a 0.4% climb.
The core CPI rose 0.3% in July, after a 0.3% increase the prior month. Economists polled by IFR Markets had predicted a 0.2% rise.
Initial jobless claims for the week ended Aug. 9 came in at 450,000, after a revised 460,000 the previous week. Economists polled by IFR Markets had predicted 440,000 initial jobless claims.
Also, continuing jobless claims for the week ended Aug. 2 came in at 3.417 million, after a revised 3.303 million the previous week. Economists polled by IFR Markets had predicted 3.300 million continuing jobless claims.
More economic data is on tap for today: July industrial production and capacity utilization and the preliminary August University of Michigan consumer sentiment index will be released.
Economists polled by IFR Markets are predicting no change in industrial production, 79.8% capacity utilization, and a 62.0 Michigan sentiment index.
In the new-issue market yesterday, Citi priced $395.3 million of consolidated fifth general resolution revenue bonds for the Dormitory Authority of the State of New York in two series. Bonds from the $114.3 million Series A mature from 2009 through 2019, with yields ranging from 2.15% with a 3% coupon in 2010 to 4.31% with a 5% coupon in 2019. Bonds maturing in 2009 will be decided via sealed bid. Bonds from the $281 million Series B mature from 2009 through 2028, with yields ranging from 2.15% with a 3% coupon in 2010 to 4.89% with a 4.8% coupon in 2028. Bonds maturing in 2009 will also be decided via sealed bid. All bonds are callable at par in 2018. The credit is rated AA-minus by Standard & Poor's and A-plus by Fitch Ratings.
Citi also priced $292.9 million of health system revenue refunding bonds for the Indiana Finance Authority. The bonds mature from 2009 through 2028, with a term bond in 2032. Yields range from 2.25% with a 4% coupon in 2009 to 5.60% with a 5.375% coupon in 2032. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's Investors Service and AA by Fitch.
Goldman, Sachs & Co. priced $183.1 million of single-family mortgage revenue bonds for the Pennsylvania Housing Finance Agency in multiple series. Bonds from the $15 million Series A, subject to the alternative minimum tax, mature in 2014, 2016, and 2022, and are priced at par to yield 4.70%, 5%, and 5.75% respectively. The bonds are callable at par in 2017. The $2.6 million Series B is priced at par and comprises a split maturity in 2009 which yields 2% and 2.125%, and a 2010 maturity yielding 2.5%. These bonds are not callable. Bonds from the $165.5 million Series C mature from 2010 through 2018, with term bonds in 2023, 2028, 2033, and 2038. Yields range from 2.50% in 2010 to 5.50% in 2038, all priced at par. These bonds are callable at par in 2017. The bonds are rated Aa2 by Moody's and AA-plus by Standard & Poor's.
RBC Capital Markets priced $69.4 million of water revenue refunding bonds for the Harrisburg, Pa., Authority. The bonds mature from 2024 through 2028, with a term bond in 2031. Yields range from 5.03% with a 4.875% coupon in 2024 to 5.35% with a 5.25% coupon in 2031. The bonds, which are callable at par in 2018, are rated A3 by Moody's.
JPMorgan priced $63.7 million of hospital revenue refunding bonds for the Illinois Finance Authority. The bonds mature from 2013 through 2018, with term bonds in 2022, 2028, and 2035. Yields range from 4.25% with a 5.25% coupon in 2013 to 5.92% with a 5.75% coupon in 2035. The bonds, which are callable at par in 2018, are rated A-minus by Standard & Poor's.
California's Fremont Union High School District competitively sold $80 million of GO bonds to Goldman Sachs, with a true interest cost of 4.60%. Pricing information was not available by press time. The bonds were slated to mature from 2009 through 2033. The bonds, which are callable at par in 2018, are rated Aa2 by Moody's and AA-plus by Standard & Poor's.
San Francisco competitively sold $42.5 million of GO bonds to BB&T Capital Markets, with a TIC of 4.20%. The bonds mature from 2009 through 2028, with yields ranging from 1.56% with a 4% coupon in 2009 to 4.63% with a 4.5% coupon in 2028. Bonds maturing from 2010 through 2013 were not formally re-offered. The bonds, which are callable at par in 2015, are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.
