Municipals decline along with Treasuries on positive jobs report; Lancaster Port bonds price

By Sheri Kasprzak

New York, July 2 – Municipals dropped on Wednesday. They followed a slip for Treasuries after private-sector businesses reportedly added more jobs than expected in June, market insiders said.

Trading was very light during the session, with less than $4.5 billion of transactions completed by the end of the day.

Yields for the eight-to-10-year range were seen higher by about 3 basis points with shorter and longer bond yields climbing by 1 bp to 2 bps on the day.

Treasury yields jumped even more on the day. The 30-year bond yield rose by 6.5 bps to close at 3.459%, the five-year note yield climbed by 5.5 bps to 1.709%, and the 10-year note yield rose by 6 bps to 2.625%.

281,000 private jobs added

Treasury prices dropped on the session after the release of Automatic Data Processing Inc.’s private sector employment report, which indicated that private-sector employment rose by 281,000 jobs in June.

Small businesses added 117,000 employees, medium-sized firms added 115,000, and large businesses reportedly added 49,000.

There were 230,000 jobs added in service-producing fields and 51,000 jobs added in the goods-producing sector.

Lancaster port sells debt

Heading up the day’s primary activity, the Lancaster Port Authority of Ohio sold $321,685,000 of series 2014 gas supply revenue refunding bonds.

The bonds (Aa3) were sold through RBC Capital Markets LLC.

The variable-rate bonds are due 2015 to 2019 with a term bond due in 2038, said a pricing sheet. The bonds all bear interest at one-month Libor plus a spread, but the spreads were not immediately available Wednesday.

Proceeds will be used to refund the authority’s series 2008 revenue bonds, which were used to prepay for a natural gas acquisition.

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