The municipal market was again weaker yesterday.

Traders said tax-exempt yields on the short to intermediate end were higher by two or three basis points, while long-end yields were higher by about five to seven basis points.

"You're almost afraid to make a bid, because you may be the only bid," a trader in Los Angeles said. "Especially when you've got customers involved, you don't want to give them a cruddy bid, but by the same token, if you make a bid, you might buy them. So it is a scary time in the bond market.

"We've actually been selling bonds all day today, and the quality stuff is still gleaning very good prices," the trader continued. "The other stuff, which is the non-quality, either doesn't get a bid or the bid is so horrendous that you can't believe it. It's all quality. If you've got decent quality, you'll get a decent trade. If you don't have decent quality, it's anybody's guess, and it's getting worse. A lot of people aren't bidding, and staying away in droves."

The Treasury market showed gains yesterday. The yield on the benchmark 10-year Treasury note, which opened at 2.66%, was quoted near the end of the session at 2.55%. The yield on the two-year note was quoted near the end of the session at 0.81% after opening at 0.88%. The yield on the 30-year bond, which opened at 3.16%, was quoted near the end of the session at 3.07%.

In economic data released yesterday, initial jobless claims for the week ended Nov. 29 came in at 509,000 after a revised 530,000 the previous week. Economists polled by Thomson Reuters had predicted 537,000 initial jobless claims.

Continuing jobless claims for the week ended Nov. 22 came in at 4.087 million after a revised 3.998 million the previous week. Economists polled by Thomson had predicted 4.020 million continuing jobless claims.

New factory orders for manufactured goods slumped 5.1% in October to $407.4 billion, which was larger than the 2.8% decrease projected by Thomson and came after a revised 3.1% decrease to $429.3 billion in September.

Excluding transportation, the level of all new manufacturing orders fell 4.2% to $358.7 billion in October, following a 4.3% drop in September to $374.5 billion.

Today, the November nonfarm payrolls report will be released. Economists polled by Thomson Reuters are predicting that 320,000 jobs were lost in November.

In the new-issue market yesterday, Depfa First Albany Securities LLC priced $89.2 million of revenue bonds for the Dormitory Authority of the State of New York in two series. Bonds from the $41.3 million Series C mature from 2010 through 2028, with term bonds in 2028, 2033, and 2039. Yields range from 3.21% with a 4% coupon in 2010 to 6.33% with a 7.5% coupon in 2039. Bonds from the $47.9 million Series D mature from 2010 through 2018, with term bonds in 2024. Yields range from 3.28% with a 4% coupon in 2010 to 6.07% with a 5.75% coupon in 2024.

The bonds from both series, which are callable at par in 2018, are insured by Assured Guaranty Corp., except some Series C bonds maturing in 2028, 2033, and 2039, which are uninsured. The underlying credit is rated A2 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch Ratings.

Albany County, N.Y., competitively sold $32.1 million of various-purpose bond anticipation notes to Commerce Capital Markets with a net interest cost of 0.95%. The notes mature in 2009, with a 2.5% coupon. They were not formally re-offered. The credit is rated MIG-1 by Moody's.

RBC Capital Markets priced $26.2 million of waterworks and sewer system revenue bonds for Mansfield, Tex. The bonds mature from 2009 through 2024, with a term bond in 2029. Bonds maturing from 2022 through 2029 were not formally re-offered. The bonds, which are callable at par in 2018, are rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.

Banc of America Securities LLC priced $25 million of general obligation public improvement bonds for the Isle of Wight County, Va. The bonds mature from 2012 through 2023 with term bonds in 2027 and 2031. Yields range from 3.26% with a 4% coupon in 2012 to 6.00% with a 5.75% coupon in 2031. The bonds, which are callable at par in 2019, are rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.

Kentucky's Lexington-Fayette Urban County Government competitively sold $13.5 million of GO public projects bonds to Robert W. Baird & Co. with a true interest cost of 3.06%. The bonds mature from 2010 through 2014, yielding 2.25% with a 3.5% coupon in 2010 and 2.50% with a 3.5% coupon in 2011. None of the other bonds were re-offered, though all maturities carry 3.5% coupons. The credit is rated Aa2 by Moody's and AA-plus by Standard & Poor's.

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