An issue of $448 million Houston bonds dominated new-issue activity yesterday, while secondary prices were narrowly mixed in light trading ahead of today's new-issue slate.

Short-term Treasury prices rose slightly as traders watched nervously as the U.S. stock market fell on the heels of large losses in Japanese stock prices.

But fears proved unwarranted, and governments finished mostly unchanged. Municipals drifted obliviously in a narrow range throughout the session in light trading.

By session's end, prices were mixed with a firm tone. In the debt futures market, the September municipal contract settled up 5/32, to 95.14.

The market continued to process supply, and The Blue List of dealer inventory fell $5.3 million, to $1.26 billion yesterday.

In light primary action yesterday, Goldman, Sachs & Co. priced the Houston public improvement refunding bonds, the largest long-term offering scheduled for sale this week.

The offering included serial bonds priced to yield from 5.10% in 1997 to 6.15% in 2005. A 2008 term maturity, containing $114 million of the loan, was priced as 7s to yield 6.30%, and a 2012 term was priced as 6-1/4s to yield 6.45%.

The bonds are rated Aa by Moody's Investors Service, AA-minus by Standard & Poor's Corp., and AA by Fitch Investors Service.

Smith Barney, Harris Upham & Co. tentatively priced $153 million of Port of Oakland, Calif., revenue bonds late in the session.

The offering included serial bonds tentatively priced to yield from 5% in 1996 to 6.50% in 2007. A 2022 term was priced as 6-1/2s to yield 6.57%.

The issue is insured by the Municipal Bond Investors Assurance Corp. and triple-A rated by both Moody's and Standard & Poor's.

Secondary action was light, but traders reported some bid-wanted activity, including a $55 million broker list. Some blocks of bonds changed hands, including $15 million Florida Board of Education 6s of 2021, which were said to have traded right around 6.35%, and $9 million Richmond GO 6-1/4s of 2021, which were said to have traded around 6.40%.

In other secondary dollar bond trading, prices were quoted narrowly mixed. New York State Water Authority AMBAC 6.20s of 2021 were quoted at 97-1/4-3/8 to yield 6.41%, Triborough Bridge and Tunnel Authority AMBAC 6-1/4s of 2012 were quoted at 98-1/2-3/4 to yield 6.38%, and Greater Orlando Aviation Authority AMT 6-3/8s of 2021 were quoted at 98-1/8-1/2 to yield 6.52%. South Carolina PSA 6-5/8 of 2031 were quoted at 100-1/8 to yield 6.625%, California 6-1/4s of 2012 were quoted at 98-1/2-3/4 to yield 6.38%, and Oklahoma Turnpike Authority MBIA 6-1/4s of 2022 were quoted at 98-1/8-3/8 to yield 6.39%.

Short-term market participants said that trading was quiet yesterday, with most investors content to remain on the sidelines ahead of a heavy slate of new deals today and tomorrow.

Market sources said $400 million California revenue anticipation notes, scheduled for sale today, are likely to fetch a 2.25% yield. The issue is rated MIG-1 by Moody's and F1 by Fitch.

Traders said they expect $240 million Massachusetts GO notes to be priced by a group led by PaineWebber Inc. today. One participant said that investors are expecting the notes to be priced to yield between 3.15% to 3.20%.

Late yesterday, California Rans 3-1/4 were quoted at 4.65% bid, 4.50% offered; Los Angeles Trans 3-3/4s, due July 1, 1993, were quoted at 2.92% bid, 2.90% offered; Pennsylvania Tan 5s were quoted at 4.60% bid, 4.45% offered; San Bernardino Co. Trans 3-3/4s were quoted at 3.03% bid, 3.00% offered; and New York State Trans 3.65s were quoted at 2.85% bid, 2.80% offered.

Looking to long-term new issuance, market players expected Lazard Freres & Co. to price $423 million of New Jersey Highway Authority senior parkway revenue refunding bonds today.

Longer bonds are likely to be priced to yield between 6.35% and 6.40%.

The issue is rated A1 by Moody's and AA-minus by Standard & Poor's.

An issue of $150 million Port of Oakland, Calif., revenue bonds was also expected to be priced by Smith Barney, Harris Upham & Co. Merrill Lynch & Co. will price $211 million of New York State Mortgage Agency home owner mortgage revenue bonds today or tomorrow.

An issue of $305 million of Florida State Board of Education refunding bonds dominate the competitive slate. The bonds are rated double-A by both Moody's and Standard & Poor's. Market players expect the bonds to garner a top yield of 6.35% to 6.40%.

Negotiated Pricings

George K. Baum & Co. priced $48 million of Colorado Regional Transportation District sales tax revenue refunding and improvement bonds.

The offering included serials priced to yield from 5% in 1996 to 6.20% in 2005. A 2012 term was priced as 6-1/4s to yield 6.384%.

The bonds are rated A1 by Moody's and AA-minus by Standard & Poor's, except for the 2012 term, which is backed by the Financial Guaranty Insurance Co. and triple-A rated by Fitch, Moody's and Standard & Poor's.

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