The municipal market was weaker by about three basis points overall yesterday, following Treasuries.

“I think people are just a little concerned about Treasuries,” a trader in Chicago said. “But we’re pretty quiet, and definitely off less than them. Maybe off two to four basis points in the long end.”

The Treasury market showed losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.94%, 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 2.43%.

“In a nutshell, governments are down, and munis are down, but not as much,” a trader in Los Angeles said. “The Street is heavy. There’s no bid. There’s too many sellers. It’s a one-way street.”

In economic data released yesterday, initial jobless claims for the week ended July 12 came in at 366,000, after a revised 348,000 the previous week. Economists polled by IFR Markets had predicted 378,000 initial jobless claims.

Continuing jobless claims for the week ended July 5 came in at 3.122 million after a revised 3.203 million the previous week. Economists polled by IFR had predicted 3.190 million continuing jobless claims.

Housing starts came in at 1.066 million in June after a revised 977,000 the previous month. Economists polled by IFR had predicted 960,000 housing starts.

Building permits came in at 1.091 million in June after a revised 978,000 the previous month. Economists polled by IFR Markets had predicted 961,000 building permits.

Manufacturing activity in the Federal Reserve Bank of Philadelphia’s region continued to contract this month as the general business conditions index narrowed to negative 16.3 in July from negative 17.1 in June. Economists surveyed by IFR predicted a reading of negative 17.0 for the index.

In the new-issue market yesterday, Lehman Brothers priced $222.5 million of student housing revenue bonds for the California Statewide Communities Development Authority. The bonds mature from 2012 through 2020, with term bonds in 2023, 2026, 2032, and 2040. Yields range from 4.00% with a 5% coupon in 2012 to 6.00% priced at par in 2040. The bonds, which are callable at par in 2018, are rated Baa2 by Moody’s Investors Service.

First Southwest Co. priced $80 million of unlimited-tax school building bonds for Texas’ Crowley Independent School District in two series. Bonds from the larger $79.7 million series of current interest bonds mature in 2009, and from 2020 through 2031, with term bonds in 2036 and 2039. Yields range from 4.20% with a 4% coupon in 2020 to 5.10% with a 5% coupon in 2039.

The bonds, which are callable at par in 2018, are backed by the Permanent School Fund guarantee program. The underlying credit is rated A2 by Moody’s and A-plus by Standard & Poor’s. The deal also contains $281,000 of capital appreciation bonds, which mature from 2008 through 2018.

South Carolina’s Charleston County School District competitively sold $63.4 million in tax anticipation notes to Lehman Brothers with a net interest cost of 1.51%. The notes mature in 2009 with a coupon of 2.5%. They are rated MIG-1 by Moody’s.

Texas’ East Central Independent School District competitively sold $49.8 million in unlimited-tax school building bonds to Prager Sealy & Co. with a true interest cost of 4.61%. Bonds mature from 2009 through 2031, with a term bond in 2033. Yields range from 2% with a 5% coupon in 2009 to 4.88% with a 5% coupon in 2033. Bonds maturing 2012 through 2017 were not formally re-offered. The bonds, which are callable at par in 2018, are backed by the PSF guarantee program.

Community School District No. 303 in St. Charles, Ill., competitively sold $42.2 million in general obligation refunding school bonds to Piper Jaffray & Co. with a TIC of 3.58%. The bonds mature 2009 through 2018, and none of the bonds were formally re-offered.

Fall River, Mass., competitively sold $33.6 million of general obligation state qualified municipal purpose loan bonds to UBS Securities LLC with a TIC of 4.30%. The bonds mature from 2009 through 2026, with a term bond in 2028. Coupons range from 5.50% in 2009 to 5.00% in 2028. None of the bonds were formally re-offered. The bonds, which are callable at par in 2018, are insured by Financial Security Assurance Inc. The underlying credit is rated Aa3 by Moody’s and AA-minus by Standard & Poor’s.

Finally, Chesapeake, Va., competitively sold $26.1 million of GO public improvement and refunding bond to PNC Capital Markets with a TIC of 3.71%. Bonds mature 2009 through 2028, with yields ranging from 1.55% on a 3% coupon in 2009 to 4.67% on a 4.5% coupon in 2028.

The bonds, which are callable in 2018, are rated Aa2 by Moody’s and AA-plus by Standard & Poor’s. Chesapeake also competitively sold $13.3 million of Series B tax increment bonds to PNC with a TIC of 4.1741%. Bonds mature 2009 through 2028, with yields ranging from 1.55% on a 3% coupon in 2009 to 4.67% on a 4.625% coupon in 2028.

 

 

 

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