The municipal market remained unchanged yesterday in light to moderate secondary market trading activity.“We’re pretty flat, pretty much the story of the week,” a trader in New York said. “Today, there’s maybe a bit of a weaker tone, but it’s mild. There’s not much movement, not much activity. Just pretty flat.”
“I’d say we’re just flat again,” a trader in Los Angeles said. “We’re pretty entrenched in the summer doldrums right now. There’s not a lot happening out there, not a lot of people doing a whole lot of anything. It’s hard to say we’re anything other than unchanged.”
In the new-issue market yesterday, Wachovia Bank NA priced $240.8 million of bonds for Riverside, Calif., including $204 million of taxable Build America Bonds. The BABs mature from 2017 through 2019, with term bonds in 2029 and 2039. Yields were not available at press time, but the bonds were priced to yield between 185 and 270 basis points higher than the comparable Treasury yield. The bonds are callable at par in 2019.
The $36.8 million tax-exempt sewer revenue bonds mature from 2012 through 2016, with yields ranging from 1.79% with a 4% coupon in 2012 to 3.11% with a 5% coupon in 2016. The bonds are not callable, and are rated A1 by Moody’s Investors Service and AA by Standard & Poor’s.
The Florida State Board of Education competitively sold $146.8 million of public education capital outlay refunding bonds to Morgan Stanley, with a true interest cost of 3.17%. The bonds mature from 2010 through 2022, with yields ranging from 0.85% with a 3% coupon in 2011 to 3.84% with a 5% coupon in 2022. Bonds maturing in 2010, 2012, and 2014 were not formally re-offered. The bonds, which are callable at 101 in 2019, declining to par in 2020, are rated Aa1 by Moody’s, AAA by Standard & Poor’s, and AA-plus by Fitch Ratings.
Merrill Lynch & Co. priced $49.3 million of cogeneration project revenue bonds for California’s Central Valley Financing Authority. The bonds mature from 2010 through 2020, with yields ranging from 1.60% with a 3% coupon in 2011 to 4.31% with a 5.25% coupon in 2020. Bonds maturing in 2010 were decided via sealed bid. The bonds, which are not callable, are rated A1 by Moody’s, A-plus by Standard & Poor’s, and A by Fitch.
Merill also priced $39 million of unlimited-tax and pass-through toll revenue bonds for Titus County, Tex. The bonds mature from 2013 through 2029, with a term bond in 2032. Yields range from 1.89% with a 2.5% coupon in 2013 to 5.10% with a 5% coupon in 2032.
The bonds, which are callable at par in 2019, are insured by Assured Guaranty Corp. The underlying credit is rated A3 by Moody’s and A by Standard & Poor’s.
The Treasury market showed little movement yesterday. The yield on the benchmark 10-year Treasury, which opened at 3.75%, finished at 3.76%. The yield on the two-year note finished at 1.22% after opening at 1.21%. The yield on the 30-year bond, which opened at 4.55%, was quoted near the end of the session at the same level.
As of Wednesday’s close, the triple-A muni scale in 10 years was at 80.7% of comparable Treasuries, according to Municipal Market Data. Thirty-year munis were 104.7% of comparable Treasuries. As of Wednesday’s close, 30-year tax-exempt triple-A general obligation bonds were at 105.2% of the comparable London Interbank Offered Rate.
In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed little movement.
A dealer sold to a customer Puerto Rico 5s of 2022 at 5.89%, even with where they traded Wednesday. Bonds from an interdealer trade of California 5s of 2037 at 5.67%, even with where they were sold Wednesday. A dealer sold to a customer Houston 5.5s of 2039 at 5.62%, even with where they were sold Wednesday.
A dealer bought from a customer New York City Transitional Finance Authority 5s of 2025 at 4.11%, even with where they were sold Wednesday. Bonds from an interdealer trade of insured Philadelphia 5.125s of 2025 yielded 5.11%, even with where they traded Wednesday.
A dealer sold to a customer insured University of California 4.5s of 2035 at 5.42%, even with where they were sold Wednesday. A dealer sold to a customer Washington 5s of 2025 at 4.05%, even with where they traded Wednesday.
Bonds from an interdealer trade of Pennsylvania Turnpike Commission 5.25s of 2024 yielded 4.82%, even with where they were sold Wednesday.
A dealer bought from a customer Texas’ Conroe Independent School District 5s of 2024 at 3.72%, even with where they traded Wednesday.
In economic data released yesterday, initial jobless claims for the week ended Aug. 1 came in at 550,000 after a revised 588,000 the previous week. Economists polled by Thomson Reuters had predicted 580,000 initial jobless claims.
Continuing jobless claims for the week ended July 25 came in at 6.310 million, after a revised 6.241 million the previous week. Economists polled by Thomson Reuters had predicted 6.230 million continuing jobless claims.
Elsewhere in the new-issue market, New York’s Rondout Valley Central School District at Accord competitively sold $12.4 million of bond anticipation notes to Oppenheimer & Co. with a net interest cost of 1.03%. The Bans mature in June 2010, with a 1.5% coupon, but were not formally re-offered.
Lake County, Ind., competitively sold $12 million of GOs to City Securities, with a NIC of 5.36%. The bonds mature from 2010 through 2018, with a term bond in 2020.