Municipal prices were mixed yesterday as the market treads water in the face of overseas events, while underwriters reported good investor demand for new issues, with only a hint of caution.
Prices opened with a firm tone but bids faded later in the session. Traders said that prices were mostly unchanged but some bonds managed small gains, while others lost 1/8 point in moderate trading.
In the debt futures market, the September municipal futures contract settled down 1/32 to 93.12 with the September MOB spread calculated at negative 135.
"There are a handful of decent situations of size out there, but the market is mostly dead," said one New York trader. "I've seen bonds trade higher than expected, but I've seen others have problems."
The market met resistance last week and is looking for another ease in monetary policy to go higher. Market participants had hoped for a sign from the Federal Reserve after today's Federal Open Market Committee meeting.
But the startling events in the Soviet Union seemed to have capped prices. New issuance has ebbed this week compared with the rest of August, but investors are still queuing up for bonds, despite lower yields.
A 23-member group led by Atlanta-based Trust Company Bank tentatively priced and restructured $169 million Fulton-Dekalb Hospital Authority, Georgia revenue certificates for the Grady Memorial Hospital.
The offering included serials priced at par to yield from 5.50% in 1995 to 6.875% in 2011.
A 2015 term is priced to yield 6.945 and a 2020 term, containing $58 million of the loan, is priced to yield 6.98%.
The issue is insured by AMBAC Indemnity Corp. and triple-A rated by both Moody's Investors Service and Standard & Poor's Corp.
Late yesterday, a Trust Company officer said that the issue was restructured to include non-callable serials.
The officer added that the issue saw mostly institutional demand with some retail buying, noting that the two shorter terms were not as strong and that there will be some float.
"Obviously it wasn't strong enough to reprice it," the officer said. "There's been a lot more uncertainty [because of events in the Soviet Union] but there's still money out there to be spent. But not nearly as much as last week."
In light competitive new issue activity, a Kidder, Peabody group won $48 million New Year State Environmental Facilities Corp. state water pollution control revolving fund revenue bonds with a true interest cost of 6.153%.
The offering included serials priced to yield from 4.40% in 1992 to 6.50% in 2011.
The issue is rated triple-A by Moody's.
Kidder reported an unsold balance of $11.9 million late in the session.
Funds from the sale, the corporation's first competitive offering, will be used by Westchester County to finance sewage treatment projects.
Secondary trading was moderate with most traders reporting a firm tone, although some cited weaker sectors.
Trading activity has picked up in the secondary as investors and dealers begin to unload stocked product gleaned from massive supply over the last month.
A small block of New York City bonds traded in the 7.90% range, a trader said.
One market source said there was a block of AMBAC-insured Alabama Water Authority 6 1/2s of 2011 out for the bid and traded around a 6.94%, five basis points higher than bonds offered late last week.
In secondary dollar bond trading, New Jersey Turnpike Authority 7.20s due 2018, were quoted 1/8 lower to 103 1/4-1/2 to yield to 6.59% to the par call in 1999. Florida State Board of Education 6 3/4s of 2021 were unchanged at 98 1/2-5/8, where they returned 6.86% to maturity.
In the New York market, the latest Triborough Bridge and Tunnel Authority insured 6s of 2019 settled unchanged at 90 1/2-5/8 to yield 6.75%.
In other dollar bond activity, Colorado River Authority insured 6 5/8s of 2021 were unchanged at 97-97 1/4 to yield 6.84% and Puerto Rico Electric Power Authority 7s of 2021 closed unchanged at 98 3/4-99 to yield 7.06%.
Short-term note yields were unchanged to slightly weaker on the day in dull trading.
In secondary trading, California notes due in June were quoted at 4.52% bid, 4.50% offered near the end of cash trading, while March California notes were quoted at 4.47% bid, 4.45% offered. New Jersey notes were quoted at 4.55% bid, 4.50% offered, while March New York State Trans were quoted at 5.08% bid, 5.05% offered. New York City notes were quoted at 4.55% bid, 4.50% offered near the end of cash trading.
$82 million Texas Housing Agency single-family mortgage revenue refunding bonds. Goldman, Sachs & Co. as senior manager tentatively priced, and then repriced and restructured the deal. The 1992 yield was lowered five basis points. The 2006 term is eliminated, while a 2005 and 2007 term were added.
The final terms included serials priced at par to yield from 4.80% in 1992 to 6.55% in 2001.
A 2005 term is priced as par to yield 7% and a 2007 term is priced to yield 7.05%, while a 2012 term, containing $31 million of the loan, is priced to yield 7.15%.
The bonds are rated double-A by Moody's Investors Service and A-plus by Standard & Poor's Corp.
$62 million Illinois Health Facilities Authority revenue refunding bonds for the Rockford Memorial Hospital was priced by Chicago-based Ziegler Securities.
The offering includes series A and B bonds tentatively priced to yield from 4.80% in 1992 to 6.70% in 2003.
A 2011 term is tentatively priced to yield and a 2021 term is tentatively priced to yield.
The issue is AMBAC-insured and triple-A rated by both Moody's and Standard & Poor's.
$51 million California State Public Works Board energy efficiency revenue bonds was priced and repriced by Goldman, Sachs to lower the 1992 yield by 10 basis points and the 1993 yield by five basis points.
The final terms included serials priced to yield from 4.60% in 1992 to 6.70% in 2006.
The issue is rated Aa by Moody's, AA-minus by Standard & Poor's, and AA by Fitch Investors Service