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Municipals close firmer by up to 3 bps; North Carolina offers up $306.69 million G.O. bonds
By Sheri Kasprzak
New York, April 16 - Municipals rounded out the day better by 2 basis points to 3 bps, market sources reported, largely ignoring the mixed Treasuries market.
The larger offerings of the week have already priced, leaving very little pressure on the market with Passover and the coming Good Friday holiday keeping new-issue action very light.
The municipal-to-Treasury ratio for the 10-year maturity was 87.5%, said Alan Schankel, managing director with Janney Montgomery Scott LLC, the lowest since June 2011.
"Lack of municipal new issue volume is an underlying factor in falling ratios," Schankel said Wednesday.
"MSRB trading volume of $11.8 billion was a bit ahead of the last month's $10.9 billion daily average."
Meanwhile, the five-year Treasury note, which is most sensitive to monetary policy, rose by 3.5 bps to end the day at 1.653%. The 10-year note was mostly flat at 2.637%, and the 30-year bond yield closed down slightly at 3.453%.
During a speech to the Economic Club of New York, Federal Reserve chairwoman Janet Yellen offered up a scenario of "maximum" employment and 2% inflation by the end of 2016.
North Carolina brings G.O.s
The largest deal of the week priced. The State of North Carolina hit the market with $306,685,000 of series 2014A general obligation refunding bonds.
The bonds (Aaa/AAA/AAA) were sold competitively, but the issuer did not return calls for the winning bidder Wednesday.
The bonds are due 2015 to 2025 with 5% coupons and yields from 0.13% to 2.39%, said a pricing sheet.
Proceeds will be used to refund existing G.O. debt for the state.
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