An issue of $389 million New York Local Government Assistance Corp. bonds were priced with a maximum yield of 6.30% yesterday, while secondary prices ended mixed in light trading.
Treasury prices were lower for most of the session as market players consolidated and took profits amid fears of President Bush's tax cut proposals.
But those worries evaporated late the day, when traders decided not to be concerned about the proposed tax cuts and Treasury prices higher. Municipal prices ended mixed.
In the debt futures market, the December municipal contract settled down 1/32, to 97.29.
The December MOB spread widened to negative 283 from negative 276 Wednesday, a record for that contract.
Secondary trading was lackluster, and most attention was on new deals.
New issues
Leading new-issue action in the negotiated sector, Goldman, Sachs & Co. as senior manager priced and repriced the New York Local Government Assistance Corp. bonds, lowering yields on the short end of the scale.
At the repricing, serial bond yields were lowered by five to 10 basis points from 1993 through 2002.
The offering included serial bonds priced to yield from 2.80% in 1993 to 6.17% in 2008. A 2012 term, containing $59 million of the loan, was priced as 6s, to yield 6.23%; a 2018 term, containing S118 million of the loan, was priced as 6s, to yield 6.28%; and a 2021 term containing $76 million of the loan, was priced as 6 1/4s, to yield 6.30%.
The bonds are rated A by Moody's investors Service and Standard & Poor's Corp. and A-plus by Fitch Investors Service.
Dominating competitive new-issue activity, meanwhile, a Bank of America group won $124 million of California industry Urban Development Agency Civic-recreational-Industrial-redevelopment project No. 1 tax allocation refunding bonds.
The firm reported an unsold balance of approximately $14.7 million late in the day.
The issue was won with the interest cost of 5.8192% and serial bonds were reoffered to investors at yields ranging from 3% in 1993 to 6% in 2012. A 2015 term, containing $21 million of the loan, was priced as 6s, at par.
The bonds are insured by the Municipal Bond Investors Assurance Corp. and are triple-A rated by Moody's and Standard & Poor's.
Returning to the negotiated sector, the First Boston Corp. priced and repriced $86 million of Indiana Health Facility Financing Authority hospital revenue refunding bonds for the Methodist Hospital of Indiana.
The yield on the 2015 term bond was raised by two basis points late in the session.
Serial bonds were prices to yield from 3% in 1993 to 6.05% in 2006. A 2011 term was priced as 5 3/4s, to yield 6.20%; and a 2015 term, containing $26 million of the loan, was priced as 5 3/4s, to yield 6.30%.
The bonds are rated Aa by Moody's and AA-minus by Standard & Poor's.
Rauscher Pierce Refsnes Inc. priced and repriced $69 million Travis County, Tex., various refunding bonds.
At the repricing, Series A yields on serial bonds in 2000 were raised by two basis points and by five basis points from 2001 through 2009. Series B yields in 2000 were raised by two basis points and by five basis points from 001 to 2007.
The final reoffering included $51 million of limited tax refunding bonds priced to yield from 2.75% in 1993 for 6.05% in 2009. Also included was $19 million unlimited tax refunding bonds priced to yield from 2.75% in 1993 to 5.59% in 2007.
The bonds are insured by MBIA and are triple-A rated by Moody's and Standard & Poor's.
PaineWebber Inc. priced $69 million Tucson, Ariz., Water System revenue refunding bonds.
The offering included serials priced to yield from 3.20% in 1993 to 6.10% in 2009. A 2012 term was priced as 5 3/4s, to yield 6.20%; and a 2018 term, containing $39 million of the loan, was priced as 5 3/4s, to yield 6.25%.
The bonds are rated A1 by Moody's and A-plus by Standard & Poor's.
Secondary Market
Traders reported moderate action during the day, and prices were mixed, with some bonds posting gains of 1/8 to 1/4 point, while others lost 1/8 to 1/4 point.
In secondary dollar bond trading, Chicago GO AMBAC 5 7/8s of 2022 were quoted at 95 1/8-3/8, to yield 6.23%; Puerto Rico 6s of 2014 were quoted at 94-1/4, to yield 6.25%; and Florida Board of Education 6s of 2022 were quoted at 98 1/4-3/4, to yield 6.12%. Los Angeles Department of Water and Power 6s of 2032 were quoted at 97 1/2-98, to yield 6.16%; and New York City Water Authority 6s of 2017 were quoted at 95 3/4-7/8, to yield 6.34%.
In the short-term note sector, yields were 10 basis points higher on the day amid increased selling, traders said.
In the short-term note sector, yields were 10 basis points higher on the day amid increased selling, traders aid.
In late trading, Los Angeles Trans were quoted at 2.98% bid, 2.95% offered; Texas Trans were quoted at 2.98% bid, 2.95% offered; and Wisconsin notes were quoted at 3% bid, 2.95% offered. New York City Tans were quoted at 2.95% bid, 2.90% offered.
Pre-refunded bond trading has been brisk recently, traders said. With several large buyers visiting the sector.
In late trading yesterday, pre-refunded bonds with national names, callable Jan. 1, 1995, were bid at 3.70%, while bonds due in mid-1995 were quoted bid at 3.80%. Bonds callable in 1996 were quoted at 4.10% bid, 4% offered.
