The municipal market was again unchanged yesterday, as the Dormitory Authority of the State of New York came to market with over $400 million of debt.
Morgan Stanley priced $401.6 million of revenue bonds for DASNY on behalf of New York University.
The bonds mature from 2015 through 2029, with term bonds in 2034 and 2039. Yields range from 2.63% with a 4% coupon in 2015 to 4.90% with a 5% coupon in 2039.
The bonds, which are callable at par in 2019, are rated Aa3 by Moody’s Investors Service and AA-minus by Standard & Poor’s.
Traders said yields in the secondary market were unchanged.
“We’re just pretty flat again,” a trader in New York said. “There really hasn’t been much movement to speak of in the secondary this whole week. There has been some decent activity out there, and deals are getting done, but there’s just no change out there. We’ve been pretty flat for virtually the whole week.”
“I’m actually seeing maybe some slight firmness on the short end, and a bit of a weaker tone on the long end, but not enough to move the scale, in my view,” a trader in Los Angeles said. “I’d call it unchanged, for the most part.”
The Treasury market was mixed yesterday. The yield on the benchmark 10-year note opened at 3.52% and was quoted near the end of the session at 3.53%. The yield on the two-year note opened at 0.90% and was quoted near the end of the session at 0.89%. The yield on the 30-year bond was quoted near the end of the session at 4.41%, after opening at 4.40%.
Yesterday’s Municipal Market Data triple-A scale yielded 3.03% in 10 years and 3.82% in 20 years, matching levels of 3.03% and 3.82%, respectively, Wednesday. The scale yielded 4.24% in 30 years yesterday, following Wednesday’s level of 4.23%.
As of Wednesday’s close, the triple-A muni scale in 10 years was at 85.4% of comparable Treasuries, according to MMD, while 30-year munis were 95.7% of comparable Treasuries. Also, as of Wednesday’s close, 30-year tax-exempt triple-A rated general obligation bonds were at 98.6% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market yesterday, Wachovia Bank NA priced $120.6 million of bonds for the Virginia Resources Authority in two series.
Bonds from an $82.2 million series mature from 2010 through 2030, with yields ranging from 0.39% with a 3% coupon in 2010 to 4.08% with a 5% coupon in 2030.
Bonds from a $38.3 million series mature from 2010 through 2030, with yields ranging from 0.50% with a 2% coupon in 2010 to 4.36% with a 4.25% coupon in 2030.
All the bonds are callable at par in 2019, and are rated Aa2 by Moody’s and AA by Standard & Poor’s.
Barclays Capital priced $50 million of revenue bonds for Hempstead, N.Y., to benefit Molloy College.
The bonds mature from 2012 through 2019, with term bonds in 2023, 2029, and 2039. Yields range from 3.00% with a 5% coupon in 2012 to 5.88% with a 5.75% coupon in 2039. The bonds, which are callable at par in 2019, are rated BBB-plus by Standard & Poor’s.
Barclays Capital also priced $45 million of bonds for Ohio in two series, including $26.1 million of taxable Build America Bonds.
Those bonds mature from 2015 through 2019, with yields ranging from 3.21% in 2015, or 2.09% after the 35% federal subsidy, to 4.59% in 2019, or 2.98% after the subsidy, all priced at par. The bonds were priced to yield between 70 and 105 basis points over the comparable Treasury yield.
Bonds from the $18.9 million tax-exempt series mature from 2010 through 2014, with yields ranging from 0.93% with a 3% coupon in 2011 to 2.15% with a 4% coupon in 2014. Bonds maturing in 2010 were decided via sealed bid.
None of the bonds are callable. The credit is rated Aa2 by Moody’s, AA-plus by Standard & Poor’s, and AA by Fitch Ratings.
In the competitive market, Mississippi sold $40.3 million of GO notes to Citi, with a true interest cost of 0.36%. The notes mature in November 2010 with a 1.25% yield, but were not formally re-offered. The credit is rated MIG-1 by Moody’s, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch.
In economic data released yesterday, initial jobless claims decreased by 20,000 to 512,000 in the week ending Oct. 31. Continuing claims declined by 68,000 to 5.749 million for the week ending Oct. 24. Continuing claims have fallen for seven consecutive weeks and are at the lowest level since March 21.
Economists expected 524,000 initial claims and 5.750 million continuing claims, according to the median estimate from Thomson Reuters.
Nonfarm unit productivity increased at a 9.5% annual rate in the third quarter. Unit labor costs declined at a 5.2% annual rate in the third quarter as productivity outpaced the increase in hourly compensation.
Economists polled by Thomson Reuters expected productivity to rise 6.2% and unit labor costs to decline 4.0% in the third quarter.