The municipal market was unchanged to slightly weaker yesterday.
"Treasuries were off a little bit, but it didn't carry over too much into munis," a trader in Los Angeles said. "We were probably unchanged on the short end, maybe stretching out to some intermediate bonds, but from 15 years on out, we were definitely off. Probably a good two or three basis points on the long end."
The Treasury market showed some losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 4.02%, finished at 4.04%. The yield on the two-year note was quoted near the end of the session at 2.57% after opening at 2.54%. The yield on the 30-year Treasury bond finished at 4.68% after opening at 4.64%.
Trades reported by the Municipal Securities Rulemaking Board showed losses. A dealer sold to a customer California 5.125s of 2036 at 5.26%, two basis points higher than where they were sold Tuesday. A dealer sold to a customer New York Metropolitan Transportation Authority 5s of 2030 at 5.15%, up three basis points from where they were sold Tuesday. A dealer sold to a customer Reading, Pa., 5s of 2035 at 5.04%, one basis point higher than where it was sold Tuesday.
"A lot of the trades that have been happening, have been happening on the long end," a trader in New York said. "It picked up in the [early] morning just to try to get business done, but since then, it's kind of died down. We're kind of just going through the motions now. If you're off, you're probably going to be off about two basis points or so."
In the new-issue market yesterday, JPMorgan priced $834 million of general obligation bonds for New York City in two series. The pricing followed a three-day retail order period in which $384 million was sold to retail investors. Bonds from the larger $800 million Series A mature from 2010 through 2029, with yields ranging from 2.23% with a 4% coupon in 2010 to 5.03% with a 4.875% coupon in 2029. Bonds from the smaller $33.5 million Series G mature from 2014 through 2026, with yields ranging from 3.61% with a 4% coupon in 2014 to 4.95% with a 4.75% coupon in 2026. All the bonds, which are callable at par in 2018, are rated Aa3 by Moody's Investors Service, AA by Standard & Poor's, and AA-minus by Fitch Ratings.
New York City also competitively sold $165 million of taxable GOs to JPMorgan with a true interest cost of 5.64%. The bonds mature in 2020 with a 5.64% coupon and were not formally re-offered.
The Gwinnett County, Ga., Water and Sewerage Authority competitively sold $190 million of revenue bonds to Wachovia Bank NA with a TIC of 4.35%. The bonds mature from 2013 through 2028, with yields ranging from 3.56% with a 4% coupon in 2016 to 4.43% with a 4.25% coupon in 2023. Bonds maturing from 2013 through 2015, in 2017, 2021, and from 2024 through 2028 were not formally re-offered. The bonds, which are callable at par in 2018, are rated triple-A by all three major credit agencies.
Albuquerque Municipal School District No. 12 competitively sold $134 million of GO school building bonds to Piper Jaffray & Co. with a TIC of 4.20%. The bonds mature from 2010 through 2023, with yields ranging from 3.40% with a 4% coupon in 2014 to 4.32% with a 4.5% coupon in 2019. Bonds maturing from 2010 through 2013 and from 2020 through 2023 were not formally re-offered. The bonds, which are callable at par in 2016, are rated Aa2 by Moody's and AA by Standard & Poor's.
Los Angeles competitively sold $101 million of GOs to Merrill Lynch & Co. with a TIC of 4.22%. The bonds mature from 2009 through 2026, with a term bond in 2028. Bonds maturing in 2010 yield 2.15% with a 5% coupon. None of the remaining bonds were formally re-offered. The bonds, which are callable at par in 2018, are rated Aa1 by Moody's and AA by both Standard & Poor's and Fitch.
First Southwest Co. priced $97.3 million of unlimited-tax bonds for Texas' Eagle Mountain-Saginaw Independent School District. The bonds mature from 2009 through 2028, with term bonds in 2033, 2038, 2043, and 2048. Yields range from 2.29% with a 3.25% coupon in 2010 to 5.16% with a 5.5% coupon in 2048. The bonds, which are callable at par in 2018, are backed by the state's triple-A Permanent School Fund guarantee program. The underlying credit is rated AA-minus by Standard & Poor's and A-plus by Fitch.
Morgan Stanley priced $64.5 million of bonds for the Rhode Island Housing and Mortgage FinanceCorp. in three series. Bonds from the $16.2 million Series A1 mature from 2009 through 2017, with yields ranging from 2.00% in 2009 to 5.375% in 2034, all priced at par. Bonds from the $27.3 million Series A2 mature in 2036 and 2038, yielding 5.50% and 5.625%, respectively, both priced at par. And bonds from the $21.2 million Series B, which are subject to the alternative minimum tax, mature in 2017, 2018, 2023, and 2028, with yields ranging from 5.00% in 2017 to 6.00% in 2028, all priced at par. All the bonds are callable at par in 2018, and are rated Aa2 by Moody's and AA-plus by Standard & Poor's.
Waterford, Conn., competitively sold $29.4 million of GO bond anticipation notes to Commerce Capital Markets with a net interest cost of 1.55%. The Bans mature in Aug. 2009, yielding 2.75%, priced at par. The credit is rated MIG-1 by Moody's.
The economic calendar was light yesterday. However, today initial jobless claims for the week ended Aug. 2 and continuing jobless claims for the week ended July 26 are set for release. June wholesale inventories and sales will be released tomorrow.
Economists polled by IFR Markets are predicting 430,000 initial claims, 3.225 million continuing claims, a 0.6% increase in wholesale inventories, and a 0.8% rise in wholesale sales.