Just under $3 billion of new deals met with a mixed reception yesterday, while a constructive tone in the secondary faded.
Municipals opened with a hesitant tone ahead of $2.7 billion of sizable offerings in both the competitive and negotiated sectors, topped by $672 million New York City bonds. A stronger Treasury market soon gavethe market
some confidence, traders said, and they became more constructive. They termed action light, but said they were able to sell bonds to permanent investors and the bid was said to improve about 1/8 to 1/4 point in spots by mid-session. The Treasury 30-year bond, which simply gyrated within its familiar range of 6. 1 0% and to the lower end of the in the day. Municipal futures were choppy in sympathy, but cash was stable, although traders said what little activity there was soon dissipated.
Late in the day, apathy, resulting from recent losses and end-of-the-year defensiveness, returned. Combined with some disappointing new issue results the better tone quickly soured.
By session's end, prices were unchanged to down 1/8 to 1/4 point.
High-grade bond yields were unchanged on the day, but the tone was firm, thanks to well bid and well received competitive gilt-edged deals.
In secondary dollar bond trading, Chicago O'hare MBIA 5s of 2018 were quoted at 5.60% bid, 5.56% offered; New York State Power Authority 51/4s of 2018 were quoted at 96/8-97 to yield 5.52%; and Pittsburgh Water and Sewer FGIC 43/4s of 2016 were quoted at 5.42% bid-none. Florida State Board of Education 5 1/8s of 2022 were quoted at 943/4-95 to yield 5.49% and Los Angeles DEWAP 5.40s of 2031 were quoted at 5.69% bid, 5.64% offered.
In the debt futures market, the December municipal contract settled down 1/32 tO 102.06, after posting a low of 102.00 and a high of 102.17. The MOB spread widened to negative 480 from negative 469 on Friday.
Although secondary traders touted a better atmosphere, new deals dominated the playing field. The forward calendar has grown in recent weeks and The Bond Buyer's 30-day visible supply remained at $7.38 billion yesterday. The Blue List of dealer inventory rose $76.9 million to $1.65 billion.
Competitive issues sold down to small balances on average, while underwriters, in most cases, were able to lower yields on the short and long end of negotiated deals. The mid-section, players said, was a tougher sell.
Topping the negotiated sector, a 29-member syndicate led by Goldman, Sachs & Co. priced and repriced $672 million general obligation bonds for New York City.
At the repricing, serial bond yields were raised by five basis points from 2007 through 201 1 and by three basis points from 2012 through 2015.
Goldman Sachs underwriters could not be reached before press time.
The final offering included serial bonds only, priced to yield from 3% in 1994 to 6.03% in 2015. Bonds totaling about $23 million in 1993 were not formally reoffered to investors.
The issue is rated Baa 1 by Moody's Investors Service and the managers said they expected Standard & Poor's Corp. and Fitch Investors Service to rate the issue single-A-minus.
Meanwhile, the competitive slate featured the sale of $345 million non-callable Georgia full faith and credit general obligation bonds.
A bidding group led by Lehman Brothers won the issue with a true interest cost of 4.784%.
Goldman Sachs had the cover, bidding a TIC of 4.837 1 %.
Lehman reported an unsold balance of about $59 million late in the day.
Serial bonds were reoffered to investors at yields ranging from 2.70% in 1994 to 4% in 1998 and from 5.15% in 2011 to 5.20% in 2013. Bonds from 1999 through 2010 were not formally reoffered to investors.
The bonds carry gilt-edged triple-A ratings from Moody's, Standard & Poor's and Fitch.
In other high-grade competitive action, Lehman also won $150 million Los Angeles Department of Water and Power, Calif., water works refunding revenue bonds with a TIC of 5.29692%.
Morgan Stanley had the cover, bidding a TIC of 5.3070%.
Lehman reported an unsold balance of $5.52 million.
Serial bonds were reoffered at yields ranging from 3.35% in 1995 to 5.40% in 2014. A 2018 term was reoffered with a coupon of 4.50% to yield 5.48%; a 2023 term was reoffered as 41/2s to yield 5.48%; and a 2030 term was reoffered as 41/2s to yield 5.56%.
The issue is rated double-A by Moody's and Standard & Poor's.
In other negotiated action, CS First Boston priced and repriced $345 million lease revenue bonds through the Los Angeles County Public Works Financing Authority for the multiple capital facilities project IV.
Serial bond yields were lowered by three basis points in 2007 at the repricing.
The final scale included non-callable serial bonds priced to yield from 2.80% in 1994 to 5.30% in 2008. A 2010 term, containing $50 million, was priced with a coupon of 4.75% to yield 5.40%; a 2013 term, containing $59 million, was priced as 43/4s to yield 5.45%; and a 2016 term, containing $38 million, was priced as 51/4s to yield 5.56%.
The bonds are insured by the Municipal Bond Investors Assurance Corp. and rated triple-A by Moody's and Standard & Poor's.
A 16-member syndicate led by Merrill Lynch & Co. priced and repriced $334 million Washington Metropolitan Area Transit Authority gross revenue transit refunding bonds.
At the repricing, yields were lowered by rive to 15 basis points from 1994 through 1998, by three to five basis points from 2007 through 2010, and by five in 2014.
The final scale included serial bonds priced to yield from 2.65% in 1994 to 5.25% in 2010. A 2014 term, containing $75 million, was priced as 51/4s to yield 5.43%. Bonds in 2009 and 2010 are non-callable.
The bonds are insured by the Financial Guaranty Insurance Co. and rated triple-A by Moody's and Standard & Poor's.
Standard & Poor's Corp. yesterday formally announced it had assigned an A rating to the Washington Metropolitan Area Transit Authority's $350 million revenue refunding bonds. The rating agency said the outlook on the rating is stable.
Standard & Poor's said its rating reflected the essential nature of the transit system, strong federal and local support, and strong legal safeguards for debt service repayment.
The authority operates Metrorail, an 81.8 mile system that will grow to 103 miles upon completion in 2001. In addition, the authority operates the Metrobus system, which services areas not covered by Metrorail.
Morgan Stanley & Co. priced, repriced, and restructured $219 million New York State Dormitory Authority insured revenue bonds for New York University.
At the repricing, Series 1993A serial bond yields were lowered by 10 basis points in 1994, 1995, and 1996. Yields were also lowered by three basis points in 2008, 2009, and by nine basis points in 201 1. A 2010 term maturity was eliminated. Series 1993B yields were lowered by 10 basis points in 1995 and 1996, by three basis points in 2008, and by five basis points in 2009.
The final offering included $183 million Series 1993A bonds priced to yield from 2.65% in 1994 to 5.20% in 2009. A 2011 term was priced with a coupon of 5% for a return of 5.263%. There also were $35 million Series 1993B bonds, priced to yield from 3.30% in 1995 to 5.20% in 2009.
The offering is MBIA-insured and rated triple-A by Moody's and Standard & Poor's.
William Blair & Co. as senior manager priced $180 million Chicago GO bonds.
The offering included serials priced to yield from 4.25% in 1998 to 5.55% in 201 1. A 2013 term was priced as 53/8s to yield 5.65%; a 2018 term was priced as 51/4s to yield 5.69%; and a 2024 term, containing $64 million of the loan, was priced as 51/2s to yield 5.72%.
The bonds are FGIC-insured and rated triple-A by Moody's and Standard & Poor's.
Goldman Sachs also priced and repriced $154 million wastewater refunding and capital improvement revenue bonds for the Hampton Roads, Va., Sanitation District.
At the repricing, yields were lowered by five basis points in 1994 and 1995, and by three to five basis points from 2004 through 2008. The coupon was lowered to 5% from 5.25% in 2023.
The final scale included serial bonds priced to yield from 3.35% in 1995 to 5.35% in 2013. The 2023 term, containing $18 million, was priced as 5s to yield 5.48% in 2023.
The bonds are rated double-A by Moody's and Standard & Poor's.
CS First Boston priced, repriced, and restructured $145 million Wisconsin Health and Educational Facilities Authority revenue bonds for the Aurora Health Care Obligated group.
Serial bonds were raised by five basis points from 1999 through 2008. A 2012 term replaced an original 2013 maturity.