NEW YORK - Alameda Corridor Transportation Authority came to market with a $683 million subordinate lien revenue refunding issue, which included a $211 million taxable component while cash bonds weakened.
Treasuries were narrowly mixed coming off earlier highs reached when Federal Reserve Board Chairman Alan Greenspan began his testimony before the Joint Economic Committee of Congress.
As yet, the protracted period of monetary accommodation has not fostered an environment in which broad-based inflation pressures appear to be building, the Fed chairman said in his prepared remarks.
In recent trading, the two-year Treasury note was quoted down 2/32 to yield 2.18%, the 10-year note was quoted unchanged to yield 4.44% and the 30-year bond was quoted up 2/32 to yield 5.24%.
Ahead, the Federal Reserve is expected to release its Beige Book, an anecdotal summary of economic conditions in the 12 Fed districts, at 2 p.m., EDT.
In municipals, cash bond yields were quoted one or two basis points higher reflecting weakness in new issue pricing and skittish Treasuries. Traders said the market had a weak tone despite some earlier firming in Treasuries, as a result of a delayed reaction to a late sell-off in the government bond market yesterday.
In the new issue market, Goldman Sachs tentatively priced $683 million Alameda Corridor Transportation Authority subordinate lien revenue refunding issue, which included $211 million in taxable bonds.
The tax-exempt portion of the deal included $298 million capital appreciation bonds and $174 million convertible capital appreciation bonds.
The yield to maturity on capital appreciation bonds ranged from 4.39% in 2013 to 5.43% in 2022 and 5.70% in 2029 and 2030. The yield to maturity on convertible capital appreciation bonds ranged from 5.30% in 2023 to 5.45% in 2025.
The issue is insured by Ambac Assurance Corp. and carries underlying ratings of Baa1 from Moodys Investors Service and BBB-plus from Standard & Poors and Fitch Ratings.
Meantime, Maryland Department of Transportation came to market with a total of $405 million consolidated transportation bonds, sold in two issues.
Merrill Lynch won $320 million Series 2004 bonds with a low interest cost of 4.02%. The issue included serials maturing from 2007 to 2019 but none were formally reoffered.
Lehman Brothers won $85 million refunding bonds with a low interest cost of 3.30%. Serials were reoffered at yields ranging from 1.77% in 2006 to 3.86% in 2014, while bonds due in 2004 and 2005 were not formally reoffered.
Refunding bonds were reoffered 10 basis points cheaper than comparable maturities on the Municipal Market Datas Tuesday triple-A yield curve scale.
Standard & Poors and Fitch rated both issues AA, but Moodys only rated the refunding deal Aa2.
Also, UBS Financial Services won $94 million Seattle, Wash., limited tax general obligation refunding bonds. No further reoffering details are currently available.
In addition, Wachovia Bank tentatively priced $125 million North Carolina Infrastructure Finance Corporation certificates of participation.
COPs were priced to yield from 1.86% in 2006 to 4.93% in 2024.
The issue is rated Aa2 by Moodys, AA-plus by Standard & Poors and AA by Fitch.
Bear, Stearns & Co. tentatively priced $92 million Illinois Finance Authority revenue refunding bonds.
Serials were priced to yield from 1.60% in 2004 to 4.77% in 2016 and from 5.17% in 2021 to 5.35% in 2023.
The issue is rated A2 by Moodys and A by Standard & Poors and Fitch.
Earlier, Lehman Brothers opened a retail order period on $250 million Metropolitan Washington Airports Authority airport system revenue bonds ahead of institutional pricing tomorrow.
The issue contained two bullet maturities due in 2028 and 2034, but only the first one was offered during the retail order period. It totaled $38 million and was priced at par to yield 5.05%.
The issue is insured by Financial Security Assurance and carries underlying ratings of Aa3 from Moodys Investors Service, A-plus from Standard & Poors and AA-minus from Fitch Ratings.
Finally, Merrill Lynch opened the second day of a retail order period on $1.75 billion California general obligation bonds after receiving roughly $375 million in retail orders yesterday. The order period concludes at 4 p.m. with pricing for institutions tomorrow.
Looking ahead to new issue volume, The Bond Buyer's 30-day visible supply calendar fell $175 million to $9.57 billion. The total comprises $1.94 billion of competitive loans and $7.63 billion in negotiated issues.
Disclosure
The Municipal Securities Rulemaking Board reported 30,177 trades Tuesday comprising 14,018 separate issues. Of all bonds traded, 1,626 changed hands at least four times. Most active was M150 & 135th Street Transitional Development District, Miss., transitional sales tax revenue 5s of 2024. The bonds traded 117 times at a high of 100 and a low of 99.5.
