Tax-exempt bond prices closed unchanged, but firm yesterday in light trading as dealers awaited this week's relatively light new-issue slate.
The New York sector will see most of the supply this week, with tomorrow's competitive sales of $1 billion New York City tax anticipation notes and $191.3 million New York State general obligation bonds. But traders are not expecting any problems in placing the issues, they said yesterday.
New York City received a MIG-1 rating from Moody's Investors Service yesterday, while Fitch Investors Service rated the notes F1-plus -- the first time Fitch has been asked to rate city paper. Standard & Poor's Corp. said it will rate the note issue today, but has traditionally given the tax anticipation notes an SP1-plus rating.
In the new-issue market yesterday, a Goldman, Sachs & Co. account marketed $101.4 million Houston, Tex., public improvement refunding bond issue with yields running from 4.75% in 1992 to 6.40% in 2001 and 6.75% in 2006. The final returns came in five basis points lower than those at the preliminary pricing.
The Houston issue is rated double-A by Standard & Poor's and Fitch and is expected to get the same rating from Moody's. The verbal award was received yesterday afternoon.
In the competitive sector, Mesa, Ariz., awarded $91.3 million utility systems revenue and refunding bonds to a First Boston Corp. group and $30.9 million unlimited tax GO bonds to a Merrill Lynch & Co. account.
The revenue bonds were scaled out to a 6.70% in 2004 and sold down to a $47.8 million balance. The bonds are backed by Financial Guaranty Insurance Co. and rated triple-A by Moody's and Standard & Poor's Corp. They have underlying ratings of A1 and a, respectively.
The GO bonds will yield 6.45% in 2002 and 6.55% in 2003, with the 9% bonds of 2001 yielding 6.50%. These bonds are rated triple-A by Moody's and Standard & Poor's because of the backing by MBIA Corp. and showed a $24.7 million balance. They have underlying ratings of A and A-plus, respectively.
In secondary dollar bond activity, traders said that there was some unit investment trust buying yesterday that helped boost some items 1/8 point, but that the bulk of the actively quoted names closed unchanged on the day.
New Jersey Turnpike Authority 7.20s of 2018 were quoted in late trading at 103 - 103-1/4 to yield 6.64% to the 1999 par call and 6.80% to the premium call in 1993. Florida State Board of Education 7-1/4s, due 2023, closed around 102-3/8-7/8 to yield 6.91% to the 2004 par call. And New York LGAC 7s of 2016 were at 96-3/4-97-1/4, where they returned 7.24% to maturity.
For more recent dollar bonds, Puerto Ricto Electric Authority 7s of 2021 were at 97-7/8 - 98-1/8 to yield 7.15% and Florida State Board of Education 6-3/4s of 2021 at 98 - 98-1/8 to yield 6.90%.
There was a smattering of activity in the note market where yields backed up slightly. About $20 million New York tax and revenue anticipation notes came in for the bid along with about $23 million New Jersey Trans. The New York 5.40s were quoted near the close at 5.53% bid, 5.50% offered with the New Jersey 5s at 4.98% bid, 4.95% offered. A 5.91% was paid for some Los Angeles County 5% notes in the morning, but traders said there were not enough around to be quoted late in the day.
In the prerefunded bond bond market, prices were essentially unchanged on the day with issues prerefunded into 1995 quoted at 5.80% bid, 5.75% offered.
Jersey City Lowered
Moody's Investors Service yesterday lowered its rating on Jersey City, N.J., general obligation bonds to Baa from Baal.
Approximately $35 million of debt is affected, the rating agency said.