Municipal Bonds Slip In Sluggish Trading
May 09, 2011
Traders said bonds with early calls in particular were penalized, since retail buyers who might have been willing to accept such bonds were away on vacation. A call is an option to buy a security at a specific price, usually above the current price and usually within a limited period. The big note deal is set for Tuesday, when Texas plans to sell $2.9 billion in tax and revenue anticipation notes due May 10, 2012 through competitive bidding. Note traders predicted reoffering yields of around 3.85% to 3.9%, 0.05 to 0.10 percentage point higher than general secondary levels, citing the size of the deal. Furthermore, because Texas has no income tax, yields for its munis are generally higher than in states with income taxes. Several negotiated issues also are expected to be brought to market Tuesday. About $188 million in refunding revenue bonds for a Dade County, Vast., solid-waste facility are expected to be priced by a Grigsby, Brandford group. Those bonds, with maturities to 2013, will be AMBAC-insured. Also due Tuesday are about $97 million in Multinomah County School District No. 1, Ore., bonds, expected to come to market via a Seattle-Northwest Securities group, and $60 million in Matagorda County Navigational District, Texas, revenue bonds through a Goldman Sachs group.
