Municipals firmed yesterday in sympathy with gains in the government market, but traders reported gridlock in the secondary.
Meanwhile, long-term revenue bond issuance hit and all-time high of $157.24 billion yesterday, pushing past the previous high set for all of 1992 of $154.63 billion.
Buyers pushed Treasury prices higher yesterday and municipals were able to make gains of 1/8 to 1/4 point in spots, traders said. High-grade bonds were said to be unchanged.
In secondary dollar bond trading. Los Angeles DEWAP 5s of 2033 were quoted at 95 1/8-1/4 to yield 5.29%; Ohio Building 4 3/4 of 2014 were at 5.15% bid, 5.13% offered; and Salt River 4 3/4s of 2017 were 5.16% bid, 5.15% offered.
Debt futures benefited the most and the December municipal contract settled up 9/32 to 106.04. The December MOB spread narrowed to negative 482 from negative 487.
Short-term note yields were mixed on the day, traders said.
Underwriters were able to move bonds out of some deals price earlier in the week, but traders generally reported a frustrating session that netted few results.
"It was like pulling teeth," one trader said. "The bid-side seemed okay, but it was a struggle to get anything done. The buyers, in my case, were extremely picky."
Lukewarm new issues results and growing supply have combined to pressure secondary prices. Reflecting the heavier tone, The Blue List of dealer inventory jumped $259 million yesterday to $1.68 billion. Looking ahead, the new issue calendars are slowly creeping higher. The Bond Buyer calculated 30-day visible supply yesterday at $6.83 billion. Pushing the total higher, the Florida State Board of Education said yesterday it plans to to open bids today on as much as $425 million refunding bonds.
Topping the negotiated sector yesterday Merrill Lynch & Co. priced $572 million noncallable Hawaii general obligation and GO refunding bonds.
Merrill said it received the verbal award at the original price levels. One underwriter at the firm said there was a balance of $120 million in the longer maturities, thanks to an aggressive pricing. The offering was priced five basis points through the Delphis Hanover Corp. double-A scale in 1996; 10 basis points through the scale in 2003; and 20 basis points through in 2013.
David F. Andersen, Merrill's director of national underwriting, said that, despite the balance, pricing the deal by negotiation allowed the firm to tailor the deal to attract the best interest.
"We never would have been able to accomplish this if the deal was bid competitively," Andersen said. "Because doing a negotiated deal means you have enough time and flexibility, away from risk, we were able to coupon properly to meet buyers. Clearly, it was the structure to use this week for a deal of this size."
The offering included $250 million Series CH GOs priced to yield from 3.40% in 1996 to 4.95% in 2013. The remaining $322 million Series CI GO refunding bonds were priced to yield from 3.40% in 1996 to 4.90% in 2010.
The Hawaii bonds are rated double-A by Moody's Investors Service and Standard & Poor's Corp.
In other action, William R. Hough & Co. priced, repriced, and restructured $115 million St. Petersburg Florida excise tax refunding revenue bonds.
At the repricing, a 2013 term replaced a 2012 maturity and the 2016 term bond yield was lowered by about two basis points.
Serial bonds were priced to yield from 2.60% in 1994 to 5.10% in 2010. A 2013 term was priced at par to yield 5.15% and a 2016 term, containing $24 million, was priced as 5s to yield 5.16%
The deal was insured by the Financial Guaranty Insurance Co. and rated triple-A by Moody's and Standard & Poor's.
Morgan Stanley & Co. priced $100 million Alabama Public School and College Authority refunding bonds.
The firm said it received the verbal award at the original price levels late in the day.
The offering was made up of serial bonds only, priced to yield from 3.80% in 1998 to 4.70% in 2006.
The bonds are rated Aa by Moody's and AA-minus by Standard & Poor's.
Bank of America priced $97.4 million Sonoma County, Calif., federally taxable pension obligation bonds.
An underwriter said the serial portion of the Sonoma loan was sold by mid-morning, followed by the term maturity not long afterward. The issue, which is tax-exempt in California, saw good in-state retail demand, the source said, while corporate crossover buyers and insurance companies were major takers of the term bonds. The underwriter said the firm tested the insured market and opted to go without backing, saving three basis points on the true interest cost.
Serial bonds were priced at par to yield from 4.70% in 1996 to 6.05% in 2003. A 2013 term, containing $84 million of the loan, was priced at par to yield 6.625%.
The offering is rated A1 by Moody's and AA-minus by Standard & Poor's.
NYC Health and Hospital
The New York City Health and Hospitals Corp. is considering the sale of about $300 million of debt before the end of the year, said Patrice I. Mitchell, the corporation's vice president of capital finance.
Mitchell said the agency and its investment bankers at Dillon Read & Co., are working on a deal that would finance the balance of the corporation's fiscal 1994 capital plan.
Mitchell said the agency has yet to place the new bonding on a financing calandar prepared by the state comptroller's office.
In February, HHC sold its first transaction after a decision by the administration of New York City Mayor David N. Dinkins to give the agency more control over its finances. The $550 million use was sold by a syndicate led by bookrunning senior manager Dillon Read, and co-senior manager PaineWebber Inc.
In addition, the corporation is eyeing a $328 million refunding of its debt that was sold through the state Housing Finance Authority, Mitchell said.