The municipal market was unchanged to slightly weaker yesterday. Traders said tax-exempt yields were flat to higher by one basis point.“It’s fairly quiet,” a trader in New York said. “We’re probably a little bit weaker, but there’s not a whole lot of movement. I’d say we’re weaker by maybe a basis point or so.”
“It was pretty quiet, and really somewhat flat,” a trader in Los Angeles said. “There might have been a bit of a weaker tone, but I’d say it was fairly flat on the day. If anything, we were down a basis point or so, but only in spots.”
In the new-issue market yesterday, JPMorgan priced $480.1 million of revenue bonds for Sacramento County. Bonds from the $31 million Series A mature in 2041. The bonds, which are callable at par in 2018, yield 5.69% with a 5.5% coupon.
Bonds from the $170.7 million Series B mature from 2012 through 2029, with term bonds in 2034 and 2039. Yields range from 2.50% with a 3% coupon in 2012 to 5.94% with a 5.75% coupon in 2039. Bonds maturing in 2034 are insured by Assured Guaranty Corp., while all remaining bonds are uninsured. The bonds are callable at par in 2018.
Bonds from the $112.9 million Series C contain a split maturity in 2039 and a single maturity in 2041, are callable at par in 2018, and yield 6.20% with a 6% coupon, 5.90% with a 5.75% coupon, and 6.24% with a 6% coupon, respectively.
Bonds from the $165.5 million Series D mature from 2010 through 2029, with a term bond in 2035. Yields range from 2.55% with a 5% coupon in 2011 to 6.17% with a 6% coupon in 2035. Bonds maturing in 2010 were decided via sealed bid. The bonds are callable at par in 2018. Bonds maturing from 2016 through 2025 are insured by Assured Guaranty. All other bonds are uninsured. The underlying credit is rated A3 by Moody’s Investors Service and A by Standard & Poor’s.
The Treasury market showed some gains yesterday. The yield on the benchmark 10-year note, which opened at 3.60%, finished at 3.58%. The yield on the two-year note finished at 0.98% after opening at 1.02%. The yield on the 30-year bond, which opened at 4.49%, finished at 4.45%.
As of Wednesday’s close, the triple-A muni scale in 10 years was at 82.8% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 102.5% of comparable Treasuries. Also, as of Wednesday’s close, 30-year tax-exempt triple-A general obligation bonds were at 108.5% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market, Colorado competitively sold $255 million of educational loan program tax and revenue anticipation notes to Citi and Merrill Lynch & Co.
Citi won $80 million of the deal with an effective rate of 0.55%, and Merrill Lynch won the remaining $175 million with an effective rate of 0.57%. The Trans mature in 2010 with a 1.5% coupon, and were not formally re-offered. The credit is rated MIG-1 by Moody’s and SP-1-plus by Standard & Poor’s.
Merrill also priced $150 million of revenue bonds for the California Health Facilities Financing Authority. The bonds mature in 2039, yielding 5.73% with a 5.5% coupon in 2039. The bonds, which are callable at par in 2019, are rated Aa2 by Moody’s and AA by both Standard & Poor’s and Fitch Ratings.
Southwest Securities priced $65 million of unlimited-tax school building bonds for Texas’ Irving Independent School District. The bonds mature in 2009, and from 2012 through 2031, with a term bond in 2033.
Yields range from 0.75% with a 3% coupon in 2009 to 5.05% with a 5% coupon in 2033. The deal also contains $1.7 million of capital appreciation bonds maturing in 2011. The credit is rated Aa3 by Moody’s and AA-plus by Standard & Poor’s.
First Southwest Co. priced $38.4 million of unlimited-tax school building bonds for Texas’ Bastrop Independent School District in two series. Bonds from a $37.6 million series of current interest bonds mature in 2010 and from 2013 through 2029, with term bonds in 2034, 2039, and 2042.
Yields range from 0.60% with a 2% coupon in 2010 to 5.28% with a 5% coupon in 2042. These bonds are callable at par in 2019. The deal also contained $770,000 of capital appreciation bonds, which mature in 2011 and 2012. All the bond are insured by Assured Guaranty. The underlying credit is rated A2 by Moody’s and A-plus by Standard & Poor’s.
Morgan Keegan & Co. priced $19.5 million of refunding bonds for the Indianapolis Local Public Improvement Bond Bank in two series. Bonds from the $13.4 million Series F-1 mature from 2010 through 2016, with yields ranging from 1.30% with a 3% coupon in 2011 to 3.02% with a 4% coupon in 2016. Bonds maturing in 2010 were not formally re-offered.
The bonds are not callable. The deal also includes a taxable $6 million Series F-2, which mature from 2010 through 2017, and are priced to yield between 80 and 220 basis points above the comparable Treasury yield. The credit is rated Aa1 by Moody’s and AA by Standard & Poor’s.
In economic data released yesterday, initial jobless claims for the week ended July 11 came in at 522,000, after a revised 569,000 the previous week. Economists polled by Thomson Reuters had predicted 575,000 initial jobless claims.
