Municipals ended unchanged to up point yesterday as the primary market received $370 million Metropolitan Transportation Authority, N.Y., bonds.
"I bought the uninsured portion," said Thomas G. Moles, managing director of fixed income at J & W Seligman Co., adding that he thinks the MTA deal came at their levels.
The MTA offered $203 mil- lin transit facilites revenue bonds, Series O, and $167 million commuter facilities revenue bonds, Series 1994A.
Moles prefers the commuter bonds because he believes they have better backing. Because the bonds he bought were uninsured, the yields were "fairly attractive," he said.
Moles cited several factors the MTA issue had going for it.
"It's a known name, there's a big demand for New York paper, and the market didn't feel that bad today," he said. In addition, a hefty amount of bonds will exit the market tomorrow, either because they will mature or be called.
Another source familiar with the MTA offering said it was "well received" despite "difficult market conditions." The bonds were all sold, he said.
Most popular were short serials and, after the repricing, the current coupon insured and uninsured longterm portions.
The Series O bonds consisted of serial bonds priced to yield from 3.75% in 1995 to 6.10% in 2010. A 2014 term was priced to yield 6.30%, a 2020 term was priced to yield 6.40%, and a 2024 term was priced to yield 6.386%.
At the repricing, the 2004 and 2005 maturities were changed to capital appreciation bonds. Also, yields on the 2006 to 2010 serials and the 2014 and 2020 term bonds were increased by five basis points, while the yield on the 2024 term was increased by nearly 4 basis points. A 2022 term was deleted and $23 million was added to the 2024 term.
The Series 1994A bonds consisted of serial bonds priced to yield from 3.75% in 1995 to 6.10% in 2010. A 2014 term was priced to yield 6.30%, a 2018 term was priced to yield 6.40% , and a 2024 term was priced to yield 6.60%.
At the repricing, the 2004 and 2005 bonds were switched to capital appreciation bonds. Yields on the 2006 to 2010 maturities as well as the 2014 and 2018 maturities were increased by five basis points. The 2018 was added in place of a 2020 maturity.
The Series O bonds are MBIA-insured except for the 1995 to 1997 maturities, which are rated Baa by Moody's Investors Service, BBB-plus by Standard & Poor's Corp. and Aminus by Fitch Investors Service.
The Series 1994 A bonds are also MBIA insured, except for the 1995 to 1997 and 2024 maturities. Those maturities are rated Baal by Moody's, BBB-plus by Standard & Poor's and A-minus by Fitch.
Secondary activity yesterday was light, and described as unchanged to slightly higher.
Treasuries yesterday ended up slightly more than 1/8 point to yield 7.50%.
"We have nothing to key off to make us move," a municipal analyst said.
Baring some unforseen external event that affects municipals, today should be slow and Friday should see participants exiting early for the start of the July 4 holiday weekend, the analyst said.
In debt futures, the September municipal contract settled up more than 1/4 point to 89 18/32s. Yesterday's September MOB spread was negative 415 compared to negative 417 on Tuesday.
In other action, Standard & Poor's Corp.'s Blue List of municipal bonds yesterday declined by $70.4 million to $2.18 billion.
For today, the 30-day visible supply of municipal bonds totals $2.49 billion, down $107 million from yesterday. The total is a new low for 1994 so far. Supply comprises $961 million of competitive issues, also a low for the year and down $35.3 million from yesterday, and $1.53 billion of negotiated issues, down $71.6 million from yesterday.
