| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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New York City Sells $780 Million on Lower Build America Yields |
Bloomberg - June 1, 2010 - By Brendan A. McGrail and Allison Bennett
New York City, the third-largest municipal borrower, leads issuers in a holiday-shortened week with $780 million in taxable Build America Bonds as yields run lower than at its last such sale.
The most-populous U.S. city will also sell $20 million in tax-exempts, bringing the total deal to $800 million in a week with $6.2 billion scheduled. The city’s securities are primarily backed by property taxes, preliminary offering documents show. Real estate levies remained steady in 2009 while other city tax revenue fell $4 billion, according to Judy Wesalo Temel, director of credit research at Samson Capital Advisors LLC in New York.
“The city of New York is a very strong credit in the municipal credit market,” said Gary Pollack, who helps oversee $12 billion as head of fixed-income trading at Deutsche Bank AG’s private wealth management unit in New York. “It’s a name for the BAB investor to diversify their assets with a very well- managed borrower.”
New York City’s credit is rated Aa2 by Moody’s Investors Service and AA by Standard & Poor’s and Fitch Ratings, the third-highest investment grades for each.
The average Build America security yielded 5.85 percent on May 27, according to the Wells Fargo Build America Bond Index. The last time the city sold the federally subsidized obligations, on March 18, the index was 6.15 percent.
Market Conditions
“While the city does not attempt to ‘time the market’ in the pricing of its transactions, we constantly monitor market conditions to ensure the best possible deal,” said Scott Sieber, a spokesman for the city comptroller’s office, in an e- mail.
Build Americas, created last year under the federal economic stimulus, performed better than tax-exempts last month. They returned 1.02 percent, compared with 0.73 percent for tax- exempts and a loss of 0.51 percent for U.S. corporate debt of a similar maturity and rating, according to Bank of America Merrill Lynch indexes.
Average yields on 10-year, top-rated tax-exempts were unchanged at 3.12 percent on May 28, a day after jumping the most in more than seven weeks, according to data compiled by Concord, Massachusetts-based Municipal Market Advisors. The May 27 selloff came as Treasuries tumbled on easing concern that Europe’s sovereign debt crisis will worsen.
New York City’s last Build America offering, a $644.1 million sale on March 18, was mostly priced to yield 5.97 percent for debt maturing in 2036. That was 138 basis points over 30-year Treasuries. The debt traded May 28 at 5.78 percent, 158 basis points above Treasuries. A basis point is 0.01 percentage point.
Corporate Debt
In the same period, the yield on corporate debt with a similar rating and maturity fell less, to 5.76 percent from 5.8 percent, according to Bank of America Merrill Lynch indexes.
New York City was the third-largest issuer of municipal debt in 2009, behind California and New York state, according to Thomson Reuters data.
The U.S. House voted May 28 to pass legislation extending the Build America Bond program, scheduled to expire this year, through 2012. The bill would gradually reduce the subsidy paid to issuers to 30 percent from the current 35 percent.
Following are descriptions of pending sales of municipal debt in the U.S.:
CONNECTICUT, which sued Moody’s, S&P and Fitch in 2008 for rating municipal bonds lower than comparable corporate debt, plans to issue $600 million of general obligations as soon as this week. The securities are rated Aa2 by Moody’s and AA by S&P, the third-highest, and mature in 2011 and serially from 2014 through 2018. The offering will be split into $200 million of new money and $400 million of refunding bonds. JPMorgan Chase & Co. will lead the group marketing the debt. (Added June 1)
NASHVILLE AND DAVIDSON COUNTY, Tennessee, the home of country music’s Grand Ole Opry, plans to sell $575 million in general-obligation debt as soon as this week. The offer will be split three ways, with $250 million in Build America Bonds, $275 million of tax-exempts and $50 million in taxable refunding bonds. Proceeds will help retire and refinance outstanding debt and pay for capital projects. The securities will be marketed by a group led by Goldman Sachs Group Inc. (Updated June 1)
MONTGOMERY COUNTY in Pennsylvania, the home of Bryn Mawr College outside Philadelphia, plans to sell $313.8 million in tax-exempt mortgage revenue bonds through its Industrial Development Authority as soon as this week. Income from the sale will finance the building of a hospital on a former golf course. The securities, marketed by Goldman Sachs, will mature serially from 2013 through 2020 and in 2025, 2030 and 2038. (Updated June 1)
ILLINOIS, the lowest-rated U.S. state afer California, plans to offer $500 million in tax-exempt refunding bonds as early as June 14. The securities, backed by the state’s 80 percent portion of sales tax revenue, will go toward refunding Build Illinois Bonds. Chicago-based Cabrera Capital Markets LLC will lead the group marketing the debt. (Added June 1)
--Editors: Pete Young, Mark Tannenbaum
To contact the reporters on this story: Brendan A. McGrail in New York at bmcgrail@bloomberg.net; Allison Bennett in New York at abennett23@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
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