Investors gave new deals a mixed response yesterday, while secondary prices firmed slightly in light trading.
Economic news has been plentiful this week, but yesterday's indicator went largely unnoticed. New orders for manufactured goods rose 1% in April, to $243.9 billion, while inventories inched down 0.3%.
Without any clear signs of price direction, municipal players chose to ride along behind the Treasury market, a trend that is likely to continue at least until Friday's employment data show the markets the way.
Prices opened unchanged to slightly weaker during the morning in light trading, as credit market players remain wary ahead of the jobs data.
Government prices firmed later in the session, and municipal bonds followed suit. By the close of trading, prices were unchanged to 1/8 point higher.
In the debt futures market, the September municipal contract settled up 1/32, to 94.17, while the MOB spread narrowed to negative 153 as municipals outpaced the government sector.
Most market players chose to focus on the primary sector, which featured a relatively light fare of issue. Investors were finicky yesterday, market players said, and some new deals earned mixed grades.
Leading negotiated pricings, PaineWebber Inc. marketed $248 million Charlotte-Mecklenburg Hospital Authority, N.C., healthcare system revenue bonds.
At the repricing, yields were lowered by five basis points for most serial bonds.
The final reoffering scale included serial bonds reoffered to investors at yields ranging from 2.90% in 1993 to 6.25% in 2005. A 2009 term bond was priced as 6-3/8s to yield 6.45%; a 2012 term was priced as 5-3/4s to yield 6.50%, a 2020 term, containing $102 million of the loan, was priced as 6-1/4s to yield 6.627%; and a 2022 term was priced as 6s to yield 6.59%.
Capital appreciation bonds were priced to yield 6.50% in 2006 and 6.55% in 2007.
The bonds are rated double-A by both Moody's Investors Service and Standard & Poor's Corp.
In other action, Bear, Stearns & Co. priced and repriced $218 million of Regional Transportation Authority GO bonds for Cook, DuPage, Kane, Lake, McHenry, and Will Counties,III.
Serial yields were lowered by five basis points from 1998 to the 2004 maturity; the 2022 term bond yield was lowered by about one basis point.
The final reoffering scale included $188 million Series A and $30 million Series B bonds, priced to yield from 5.35% in 1998 to 6.15% in 2004. A 2012 term was priced at par as 6-1/2s, a 2017 term was priced as 6-1/2s to yield 6.6443%, and a 2022 term was priced as 6-1/8s to yield 6.616%. Serial bonds from 2005 to 2009 were not formally reoffered to investors.
Bonds from 1998 through 2012 are non-callable.
The issue is insured by AMBAC Indemnity Corp. and triple-A rated by both Moody's Investors Service and Standard & Poor's Corp.
In competitive pricing action, $125 million Baltimore County, Md., unlimited tax bonds were won by a Lehman Brothers syndicate with a true interest cost of 5.9506%.
The issue consisted of $60 million consolidated public improvement bonds and $65 million metropolitan district bonds.
Serial bonds were reoffered to investors at yields ranging from 3.10% in 1993 to 6.25% in 2009. A 2012 term, containing $19 million of the loan, was priced as 6-1/8s to yield 6.29%.
The issue is rated triple-A by Moody's, Standard & Poor's, and Fitch.
The short-term primary sector featured $94 million of San Diego Area Local Governments pooled tax and revenue anticipation notes, priced by Sutro & Co.
The securities were reoffered to investors as 4s priced to yield 3.45%, due June 30, 1993. The issue is rated MIG-1 by Moody's and SP-1-plus by Standard & Poor's.
Secondary Market
Trading was lackluster yesterday, but traders did report some small bid-wanted lists circulating in the Street and some trades and swaps in the $5 million to $10 million range. For example, one market source said there was one involving about $10 million New Jersey Turnpike 6-1/2s of 2016. Late in the session, the bonds were quoted at 100-1/4-1/2, to yield 6.47% on the bid side.
In secondary dollar bond trading, prices were unchanged to 1/8 point higher in spots, and some bonds made gains of 1/4 point, traders said.
In late trading, Florida Municipal Power 6s of 2012 were quoted at 94-3/4-95, to yield 6.47%; Greater Orlando Aviation Authority AMT insured 6-3/8s of 2021 were quoted at 96-7/8-97-1/8, to yield 6.61%; and New York State Power Authority 6-1/4s of 2023 were quoted at 97-1/4 to yield about 6.47% on the bid side. South Carolina PSA 6-5/8s of 2031 were quoted at 98-1/2-3/4, to yield 6.73%, and Oklahoma Turnpike Authority MBIA 6-1/4s of 2022 were quoted at 97-1/4-1/2, to yield 6.45%.
Short-term participants said that trading in that sector was muted, and prices were little changed.
Late in the session, California Rans 3-1/4s were quoted at 3.45% bid, 3.40% offered; Los Angeles Trans 5s were quoted at 3.45% bid, 3.40% offered; Pennsylvania Tans 5-1/4s were quoted at 3.45% bid, 3.40% offered; and New York State Trans 3.65s were quoted at 3.08% bid, 3.05% offered.
Negotiated Pricings
Craigie Inc. priced $65 million Loudoun County Sanitation Authority, Va., water and sewer revenue bonds.
The offering included serial bonds priced to yield from 3.30% in 1993 to 6.25% in 2006. A 2010 term was priced as 6-1/4s to yield 6.375%, a 2016 term was priced as 6-1/4s to yield 6.45%, and a 2030 term, containing $20 million of the loan, was priced as 6-1/4s to yield 6.5279%.
The bonds are FGIC-insured and triple-A rated by Moody's, Standard & Poor's, and Fitch.
Merrill Lynch & Co. priced $62 million Business Development Finance Corp., Tucson, Ariz., local development lease revenue refunding bonds.
The offering included serial bonds priced to yield from 3.50% in 1993 to 6.30% in 2004. A 2008 term was priced as 6-1/4s to yield 6.45% and a 2012 term was priced as 6-1/4s to yield 6.55%.
The bonds are FGIC-insured and triple-A rated by Moody's, Standard & Poor's, and Fitch.
Goldman, Sachs & Co. priced $61 million Massachusetts Municipal Wholesale Electric Co. Power Supply System revenue bonds.
The offering included serial bonds priced to yield from 5% in 1994 to 6.70% in 2006. A 2010 term was priced as 6-5/8s to yield 6.80% and a 2018 term was priced as 6-5/8s to yield 6.85%.
The bonds are rated Baa1 by Moody's, BBB-plus by Standard & Poor's, Fitch, and Duff & Phelps.
Goldman also priced $61 million Utah Housing Finance Agency single-family mortgage purchase refunding senior bonds.
The offering included serial bonds priced at par to yield from 3.50% in 1993 to 6.35% in 2002. A 2011 term was priced at par to yield 6.40% and a 2012 term was priced at par to yield 6.80%.
The managers said they expected a rating of Aa from Moody's.
