Long-term tax-exempt bond prices fell yesterday for an eighth straight trading sessio under the relentless onslaught of new issues.
"It was another billion-dollar day in the primary market with everyone having to reprice his inventory after the new deals came," moaned a veteran bond trader. The negotiated deals continued to be well received, he admitted, but pointed out that recently most of them have had to be repriced to cheaper levels.
Actively-quoted dollar bonds were down only 1/4 point on average, but one dollar bond trader claimed the market felt "much worse." High-grade serials in the 10- to 20-year range continued to get hammered, and were up at least five basis points in yield from Monday and close to 20 basis points from last week at this time, another trader said.
A $200 million issue of Los Angeles, Calif., wastewater system revenue bonds topped the competitive slate and sold down to a serial balance of about $27 million through an underwriting account headed by Morgan Stanley & Co. The account used AMBAC Indemnity Corp. insurance on the $68.9 million 7% 2021 term bond maturity and on the $16.2 million 7% 2011 term bond maturity.
The insured term bonds, due 2021, were placed with permanent investors and were not formally re-offered. The $78.6 million uninsured 7.10 term bonds of 2018 were priced at 99 5/8 to yield 7.13%. And the insured term bonds of 2011 were offered at par to yield 7%. Virtually all of the term bonds went to tax-exempt bond funds, market participants said.
Yields on the uninsured serial bonds ranged from 4.50% in 1992 out to 7% in 2008.
The two AMBAC-backed term maturities are rated triple-A by Moody's Investors Service and Standard & Poor's Corp. The uninsured bonds will carry ratings of A1 and A, respectively.
In the negotiated sector, a First Chicago Capital Markets Inc. account priced $200 million Greater Chicago Metropolitan Water Reclamation District III., non-callable GO capital improvement bonds with a maximum yield of 7.16%. Yields after the repricing were five basis points higher than those at the earlier preliminary pricing.
The offering was comprised of a $51.5 million 2011 maturity priced at 98.327 as 7s to yield 7.16 % and serial bonds scaled from 5.60% in 1994 to 7.05% in 2008. There are no bonds maturing in 2006.
The bonds are rated double-A by Standard & Poor's and Moody's.
A Morgan Stanley & Co. account marketed $166.3 million Jacksonville Electric Authority, Fla., bulk power supply system revenue bond issue (Scherer 4 project).
The final terms of the offering included: $55.5 million term bonds, due 2021, priced at 94.704 as 6 3/4s to yield 7.18%; $33 million term bonds of 2016 offered at 95.115 as 6 3/4s to yield 7.17% and $30.6 million term bonds of 2012 priced at 98 5/8 as 7s to yield 7.125%.
There were also serial bonds yielding from 4.70 in 1992 out to 6.98% in 2007.
An officer at Morgan Stanley said that retail was the major buyer out to 1999 will trust departments and property and casualty insurance companies the big buyers of the 2001-07 maturities. The tax-exempt bond funds took most of the term maturities, the officer said.
Moody's upgraded its rating to Aa1 from Aa Jacksonville Electric Authority debt in conjunction with yesterday's sale. In upgrading the rating, Moody's cited the authority's "consistently sound financial performance, diversified power supply sources, and excellent long-term planning."
Moody's said the upgrade affects $578.8 million in electric revenue debt, about $2.6 billion (including crossover refunding bonds, in contract debt related to JEA's St. John's River Power Park, and yesterday's issue for the purchase of an ownership interes in Georgia Power Co.'s plant Scherer Unit 4.
Standard & Poor's rates the bonds Aa and Fitch gives them an AA-plus rating.
In the short-term market, a First Boston Corp. account marketed $120 million Massachusetts GO notes with a 4 3/4% rate to yield 4.15% to their Nov. 14 , 1991 maturity date.
The notes are rated SP1-plus by Standard & Poor's and are expected to be rated MIG-1 by Moody's and F1-plus by Fitch because of a letter of credit backing from Sumitomo Bank Ltd. and Industrial Bank of Japan.
Returning to the competitive market, a $30 million Kane County Forest Preserve District, Ill., issue sold down to a $10.7 million balance through Bear, Stearns & Co., at yields ranging from 5.25% in 1993 to 6.90% in 2004. The bonds are rated Aa by Moody's.
California Department of Veterans Affairs, $92.6 million home purchase revenue bonds, 1991, series A refunding bonds.
Ratings: Moody's Aa; Standard & Poor's AA; Fitch AA.
All bonds were priced at par.
The $24.6 million super sinkers of 2006 will yield 6.55%. Serials were scaled from 4.65% in 1992 to 6.75% in 2003.
The bonds were marketed through an account headed by Lazard Freres & Co. The verbal award was received yesterday.
Manatee County, Fla., $60 million public utilities revenue refunding and improvement bonds, series 1991 C.
Ratings: Moody's Aaa; Standard & Poor's AAA. MBIA insured.
The current interest bonds were comprised of serials priced to yield from 4.75% in 1992 to 6.75% in 2004 and term bonds yielding 7% in 2008 and 7.05% in 2013.
Returns on the capital appreciation bonds ran from 6.80% in 2001 to 7.25% in 2013.
The issue is being negotiated by an account led by Smith Barney, Harris Upham & Co. The verbal award was received yesterday.
Boston Water and Sewer Commission, $52.4 million general revenues bonds, 1991 series A (senior series).
Ratings: Moody's A; Standard & Poor's A-minus; Fitch A-plus. Bonds maturing 1997 through 2021 are backed by FGIC and are rated triple-A by Moody's and Standard & Poor's.
The $11 million term bonds of 2021 were offered at 86.914 as 6s to yield 7.05%. The term bonds of 2011 and 2018 will yield 7.10% and 7.15%, respectively. And the serials were priced to yield from 5% in 1992 to 7% in 2006.
Merrill Lynch & Co. is senior manager for the underwriters. The account is closed. The verbal award was received yesterday.
St. Louis Board of Education, Mo., $50 million GO school building bonds, series 1991.
Ratings: Moody's Aaa; Standard & Poor AAA. FGIC insured.
The issue has been tentatively priced to yield from 4.50% in 1992 to 6.736% in 2005 and 6.90% in 2011. There will be no formal reoffering of the 10% bonds maturing in 2006.
The bonds are being offered through an account by A.G. Edwards & Co. The written award was expected yesterday.
Purdue University Trustee, $48.8 million Purdue University Dormitory system revenue and revenue refunding bonds.
Ratings: Moody's Aaa; Standard & Poor's AAA. AMBAC insured.
The $14 million term bonds of 2015 have been tentatively priced at 90.00 as 6 1/4s to yield 7.126%. The $15.4 million term bonds of 2011 are being offered at 95 1/2 as 6 3/4 to yield 7.17%. And the serials are being offered at par to yield from 4.70% in 1992 to 6.90% in 2005.
The issue is being negotiated by an account co-managed by John Nuveen & Co. and City Securities Corp. The official award is expected today.
University of Washington, $36.2 million housing and dining system revenue bonds, series 1991.
Ratings: Moody's A; Standard & Poor's A. Bonds maturing in 2021 are MBIA insured and rated triple-A by Moody's an Standard & Poor's.
Reoffering yields are expected to run from 4.70% on Dec. 1, 1991, to 7% in 2006 and 7.20% for the $26.8 million term bonds of 2021. The $3.1 million 2001 term maturity is not being formally reoffered.
Lehman Brothers and Grigsby, Brandford, Powell Inc. are co-managers for the underwriters. The formal award is expected today.
New Mexico Mortgage Finance Authority, $33.6 million single-family mortgage program senior bonds, 1991 series A (federally insured or guaranteed mortgage loans).
Ratings: Standard & Poor's AA-minus.
Returns on the non-AMT issue run from 5.60% in 1993 to 6.85% in 2001, 7.35% in 2011, 7% for the super sinkers of 2016, and 7.40% in 2017.
Yields on the AMT issue have been set at 7.25% for the super sinkers of 2022 and 7.65% for the term bonds of 2023.
All maturities were priced at par.
The bonds were marketed through an account headed by Goldman, Sachs & Co. The verbal award was received yesterday.
Phoenix Union High School District No. 210 (Maricopa County), Ariz., $25 million school improvement bonds, project of 1988 series D (1991).
Ratings: Moody's Aa; Standard & Poor's AA.
The issue has been tentatively priced to yield 6.50% in 2001, 6.60% in 2002, 6.70% in 2003, and 6.80% in 2004.
Peacock, Hislop, Staley & Given Inc. is senior manager for the underwriters. The official award is expected tomorrow.