(Jan. 13, 2012) -- Our weekly summary will begin again with a Jan. 20 post.

Weekly Summary: End-of-Year Vacations Are Focus, Not New Deals

(Examples of Yields on Recent Municipal Bond Sales Are Lower on This Page.)

(Dec. 23, 2011) -- It was a few nights before Christmas and all through the municipal bond market there was one sound: Traders, investors, and investment bankers closing doors so they could take end-of-the-year vacations. Tax-exempt rates were virtually unchanged this week as the market began its short hibernation period for the traditional year-end break. New bond issues tapered off and probably won’t pick up steam again until the week of January 9th or later. However, some new deals will price during the first week of 2012.

There weren’t a lot of “typical” municipal bond sales to point to this week, at least not in terms of current-interest general obligation and revenue bonds. The Robla School District did sell a G.O. bond issue, but it only carried capital appreciation bonds. The Rancho Cucamonga Public Finance Authority sold special tax (Mello-Roos) refunding bonds. They were not rated. The tax-exempt yields included 3.12% in five years, 4.30% in 10 years, and 5.05% in 15 years. In contrast, a recent sale of double-A local school district general obligation bonds yielded 2.17% in 10 years.

The Bond Buyer’s 20-Bond G.O. Index was at 3.92% this week. This index tracks decent-quality (double-A) G.O. bonds with maturities of 20 years. In January of this year the Index measured as high as 5.41% amid the municipal bond panic at the time, a panic sparked in part by irresponsible default predictions by an analyst with little background in tax-exempt debt. It took some time for the market to return to normal. Tax-exempt rates eventually plummeted along with yields on other fixed-income securities.

Last January the U.S. Treasury 30-year bond was trading around 4.60%. This week it was at 2.99%. That’s another good snapshot of what happened with yields this year. “Traditional” municipal bonds continued to look very safe and attractive to investors, despite some of the issuers’ well-publicized budget challenges. Ask the Europeans whether they would rather bet on the U.S. municipal bond market or some of their troubled sovereign credits.

Examples of Yields on Recent Tax-Exempt Municipal Bond Sales

The table below shows sample tax-exempt yields for recent new-issue deals priced in California's municipal bond market. If a bond insurer provides a guarantee, the rating is the "underlying" credit on the bond. If you see AGMuni as the insurer, it is the former FSA.

Date Size Issuer Rating Insurer 2016 2021 2026 2031 2041
                   
12/14 $      10 mln Kentfield School District G.O. bonds       AA   1.20% 2.17% 3.19%     N/A     N/A
12/12 $      30 mln Pasadena water revenue bonds  AA / AA+   1.05% 2.12% 3.19%     N/A     N/A
12/09 $        6 mln Nevada High School District G.O. bond       A2   1.34% 2.61% 25:3.52     N/A     N/A
12/07 $      36 mln Tamalpais High School District G.O. bond      AAA   0.98% 2.06% 3.05%     N/A     N/A
12/06 $        4 mln Mill Valley certificates of participation       AA+     AGM  1.50% 2.75% 3.75% 4.25% 35:4.37
12/06 $      55 mln Los Angeles County lease revenue bonds    A2 / A+   1.67%     N/A     N/A     N/A     N/A
12/02 $      17 mln Rim of World Unified School Dist. GO bond       A+     AGM  2.23% 3.58% 4.38% 4.70% 5.05%
12/02 $    148 mln Cedars-Sinai Medical Center rev. (CHFFA)    A2 / A+   2.27% 3.47%     N/A     N/A     N/A
12/01 $    101 mln Calif. Dept. Veterans home purchase bonds Aa3 / AA   1.97% 3.50% 28:4.54     N/A     N/A
11/30 $      14 mln Mt. Diablo Unified School District GO bond      Aa3   1.60% 2.87% 23:3.29     N/A     N/A
11/21 $    295 mln Calif. Public Works Board lease rev. bonds Aa2 / AA-   1.64% 3.06% 3.91% 4.37%     N/A
11/17 $      14 mln Covina-Valley Unified School District GOs      Aa3   1.74% 3.04% 3.93%     N/A     N/A
11/17 $      40 mln William S. Hart High School District GOs  Aa2 / A+     AGM 1.73% 3.03%     N/A     N/A     N/A
11/17 $        5 mln St. John's Well Child & Family rev. (CMFA)       A- Cal-Mort     N/A 4.00%     N/A 5.37% 5.65%
11/16 $        5 mln Pacific Grove Unified School District GOs       AA   18:1.90 2.73% 3.83% 4.30%     N/A
11/16 $      11 mln Family HealthCare Network rev. (CMFA)       A- Cal-Mort 2.60% 4.00% 4.75% 29:5.00     N/A
11/16 $      42 mln Perris High School District Mello-Roos bond   Unrated         3.50% 4.75% 5.45% 30:5.85 6.15%
11/15 $      62 mln Southern Calif. Public Power Authority rev.    A1 / AA-      1.66% 2.95%     N/A     N/A     N/A
11/15 $    235 mln Guam business privilege tax bonds     A / A-   2.48% 3.68% 4.48% 4.75% 5.03%
11/15 $      13 mln Sacramento Metro. Fire Dist. rev. (CMFA)       AA-   2.46% 3.85% 4.68% 33:5.12 5.27%
11/10 $    100 mln Rady Children's Hospital rev. (CHFFA)       A+   2.62% 3.97% 4.78% 5.22% 5.43%
11/10 $        8 mln Gateways Hospital & Mental Health (CHFFA)       A- Cal-Mort 2.60% 4.00% 4.88% 5.29% 36:5.53
11/09 $    339 mln San Francisco general obligation bonds  Aa2 / AA   1.34% 2.49% 3.58%     N/A     N/A
11/09 $    100 mln West Contra Costa School District GOs   Aa3 / A+     AGM     N/A 3.60% 4.40% 32:4.70 4.90%
11/09 $      30 mln Salida Area PFA 1988-1 Mello-Roos bond       A     AGM 2.79% 3.94% 4.55% 30:5.00     N/A
11/09 $      14 mln Tracy Operating Partnership Mello-Roos   Unrated         3.50% 4.70% 5.35%     N/A     N/A
11/08 $      22 mln Loyola Marymount University rev. (CEFA)       A2      2.29% 3.48% 24:4.00     N/A     N/A
11/08 $        4 mln Brea Olinda Unified School District GOs      AA-   1.74% 20:2.91 4.35%     N/A     N/A
11/07 $      12 mln Ventura County Office of Education COPs      AA-     AGM 2.19% 3.48% 4.40% 4.78%     N/A
11/03 $      13 mln Porterville Unified School District GOs       A+     AGM 2.39% 3.70% 4.35%     N/A     N/A
11/03 $      41 mln Santa Monica lease revenue bonds Aa1 / AA+ mat.June 1.77% 2.97% 4.20% 4.39%     N/A
11/02 $    112 mln Fremont-Rideout Health rev. (Marysville)     A2 / A       N/A 4.25% 4.95% 5.25% 5.40%
11/02 $      86 mln San Francisco COPs (Moscone Center)  Aa3 / AA-   1.96% 3.09% 24:3.54     N/A     N/A
11/02 $        9 mln Central Union High School District GOs       A+      AGM 2.40%    N/A 24:4.25     N/A     N/A
11/01 $    497 mln Calif. Public Works Board lease rev. bonds A2 / BBB+   2.75% 4.19% 4.91% 5.20%     N/A
11/01 $      60 mln West Basin Muni. Water Dist. rev. bond Aa2 / AA-       N/A 23:3.24 3.61% 4.09% 36:4.30
10/26 $    107 mln Children's Hospital Orange County (CHFFA)     A / A   2.62% 3.98% 4.63% 5.20% 5.40%
10/26 $    350 mln Catholic Healthcare West rev. bond (CHFFA) A2 / A / A+   2.64% 4.04% 27:4.79     N/A 5.35%
10/26 $    120 mln J. David Gladstone Inst. rev. bonds (I-Bank)     A- / A   17:2.94 4.04% 4.80% 5.30%     N/A
10/26 $      32 mln Fairfield-Suisun School District GO bonds      Aa2   2.00% 20:3.20 4.00%     N/A     N/A
10/26 $        5 mln San Lorenzo Valley School District GOs      Aa2   1.91% 20:3.00     N/A     N/A     N/A
10/26 $        2 mln Poway School CFD No. 10 Mello-Roos bond   Unrated         17:4.00 5.00% 5.60% 6.05% 6.20%
10/25 $    439 mln California economic recovery bonds   Aa3 / A+   0.93%    N/A     N/A     N/A     N/A
10/25 $      42 mln Lincoln PFA 12 Bridges A.D. 95-1 bonds        A-     AGM 2.92% 4.05% 4.63%     N/A     N/A
10/20 $        5 mln Amador County School District G.O. bonds      Aa3   1.93% 3.20% 4.00%     N/A     N/A
10/19 $     1.8 bln State of California G.O. bonds     A1/ A-   2.28% 3.70% 4.39% 32:4.68 5.03%
10/19 $        7 mln Jurupa Unified School District COPs         A     AGM 2.65% 4.23% 24:4.60     N/A     N/A
10/19 $      20 mln Jurupa Unified School District GOs    A+ / AA-     AGM 2.33% 3.80%     N/A     N/A     N/A
10/18 $      39 mln Contra Costa Comm. College Dist. GO bond      AA     1.68% 2.94% 3.62%     N/A     N/A
10/13 $    492 mln Calif. Public Works Board lease rev. bonds A2 / BBB+   2.72% 4.30% 5.00% 5.34%     N/A
10/13 $      22 mln Corona-Norco School District G.O. bonds   Aa2 / AA-   1.91% 3.15% 27:4.40     N/A     N/A
10/12 $      42 mln Lodi Unified School District G.O. bonds   A+ / AA-     AGM 2.16% 3.80% 4.55%     N/A     N/A
10/12 $    235 mln L.A. County M.T.A. sales tax rev. bonds  Aa2 / AAA    1.58% 18:2.20     N/A     N/A     N/A
10/07 $      20 mln Moorpark Unified School District G.O. bonds  Aa3 / A+     AGM 2.00% 3.29% 4.25%     N/A     N/A
10/06 $    217 mln Calif. Dept. Water Resources water rev. bond Aa1 / AAA   1.50% 2.86% 3.58% 4.08%     N/A
10/06 $      40 mln Los Rios Community College Dist. GO bond  Aa2 / AA-     1.80% 3.24% 4.08%     N/A     N/A
10/06 $      80 mln Ohlone Community College Dist. GO bonds  Aa2 / AA     18:2.12 2.84% 3.73% 4.23% 4.40%
10/06 $        5 mln Benicia Unified School District G.O. bonds      Aa3    1.80% 19:2.80     N/A     N/A     N/A
10/05 $        5 mln Mountain View School Dist. G.O. bonds        A+     AGM 2.17% 3.59% 4.31%     N/A     N/A
10/05 $        8 mln San Leandro School District G.O. bonds      Aa3    1.75% 3.00%     N/A     N/A     N/A
10/05 $      12 mln Delano Elementary School Dist. G.O. bond        A     AGM 1.97% 3.30% 4.22%     N/A     N/A
09/29 $      56 mln Berkeley Unified School District G.O. bonds      AA- 26:AGM 1.55% 3.00% 3.70%     N/A     N/A
09/28 $    105 mln Livermore-Amador Valley sewer rev. bonds  Aa2 / A+    1.87% 3.09% 4.00% 4.50%     N/A
09/27 $    408 mln Los Angeles Unified School G.O. bonds  Aa2 / AA-    1.47% 2.87% 24:3.40     N/A     N/A
09/22 $      22 mln Novato Unified School District G.O. bonds   Aa2 / AA    1.08% 2.25% 3.40%     N/A     N/A
09/22 $    100 mln Chapman University revenue bonds (CEFA)       A2    1.84% 3.33% 4.16% 4.55%     N/A
09/22 $      46 mln Riverside Unif. School District G.O. bonds   Aa2 / A+    AGM  1.42% 2.70% 3.65%     N/A     N/A
09/22 $        8 mln Yosemite Unif. School District G.O. bonds         A    AGM  1.72% 3.00% 25:3.80     N/A     N/A
09/21 $        6 mln Buena Park School District G.O. bonds        AA-    AGM  1.47% 2.78% 25:3.61     N/A     N/A
09/20 $     2.4 bln State of California G.O. bonds    A1 / A-    1.61% 3.17% 4.14% 4.57% 4.80%
09/15 $        7 mln Kern Community College Dist. G.O. bonds         A+    AGM  1.67% 2.92% 25:3.86     N/A     N/A
09/15 $    148 mln Orange County Sanitation Dist. wastewater      AAA   0.95% 22:2.47 3.21%     N/A     N/A
09/15 $      47 mln Santa Clara Valley Transportation sales tax Aa2 / AAA   0.95% 2.25% 3.26%     N/A     N/A
09/14 $    430 mln California State University revenue bonds   Aa2 / A+   1.40% 2.77% 3.64% 4.23% 42:4.60
09/14 $    326 mln Sacramento Municipal Utility Dist. electric    A1 / A+   1.52% 2.84% 3.77%     N/A     N/A
09/14 $    157 mln Metro. Water Dist. Southern Calif. water rev.  Aa1 / AAA   0.95% 2.27% 3.42% 32:3.87     N/A
09/14 $        6 mln Santa Cruz County certificates of part.       A+   2.00% 3.47% 4.47% 4.85%     N/A
09/14 $        5 mln Ojai Unified School Dist. G.O. Bonds       A+    AGM 1.67% 2.95% 23:3.48     N/A     N/A
09/13 $      36 mln Huntington Beach lease revenue bonds  Aa3 / AA          1.62% 2.95% 4.09% 4.52%     N/A
09/13 $        6 mln Tulare - Porterville School COPs       A    AGM 2.00% 19:3.12     N/A     N/A     N/A
09/08 $        6 mln Dixie School District G.O. Bonds AA+ / AAA      1.05% 2.29%     N/A     N/A     N/A
09/08 $      27 mln Reed Union School Dist. G.O. Bonds     AAA      0.85% 2.07% 2.92%     N/A     N/A
09/08 $      17 mln Palo Alto utility revenue bonds Aa2 / AAA      0.95% 2.18% 3.02%     N/A     N/A
09/07 $      95 mln San Diego County Water Auth. rev. bonds  Aa2 / AA+               N/A 2.45% 28:3.64 3.92%     N/A
09/07 $        5 mln Shoreline Unified School Dist. G.O. Bonds       AA      1.32% 2.65% 3.64%     N/A     N/A
09/07 $      44 mln Chaffey High School Dist. G.O. Bonds  Aa2 / AA-      1.10% 2.45% 3.62%     N/A     N/A
09/07 $        2 mln Sebastopol School Dist. G.O. Bonds       A1     AGM 1.67% 2.95%     N/A     N/A     N/A
09/01 $      15 mln Palmdale Elem. School Dist. G.O. Bonds      Aa3     AGM 1.69% 3.12% 23:3.52     N/A     N/A
08/31 $        4 mln Mesa Union School District G.O. Bonds  AA- / AA          1.39% 2.86% 27:4.04     N/A     N/A
08/31 $      33 mln Modesto Irrigation Dist. electric rev. bonds   A2 / A+          12:1.00     N/A 4.27% 4.75%     N/A
08/30 $      34 mln West Basin Muni. Water Dist. rev. bonds  Aa2 / AA-          17:1.50 2.76% 24:3.52     N/A     N/A
08/25 $      52 mln Upper Santa Clara JPA revenue bonds  Aa3 / AA          1.25% 2.82% 3.90%     N/A     N/A
08/25 $        6 mln Castro Valley School District COPs        A+     AGM   1.95% 3.55% 4.60% 32:5.13     N/A
08/24 $    350 mln San Francisco Airport revenue bonds    A1 / A+       N/A 22:3.39 4.15% 30:4.49     N/A
08/24 $    350 mln San Francisco Airport rev. bonds (AMT)    A1 / A+ AMT tax     N/A 22:4.09 4.80% 30:5.09     N/A
08/24 $      14 mln Murrieta Valley School District COPs    A3 / A       N/A     N/A     N/A     N/A 5.75%
08/19 $      20 mln Azusa Unif. School Dist. G.O. Bonds      AA-          1.32% 2.79% 24:3.55     N/A     N/A
08/18 $    400 mln University of Calif. Regents revenue  Aa1 / AA        1.08% 2.60% 3.53% 4.14% 4.39%
08/18 $      62 mln San Jose Unif. School Dist. G.O. Bonds  Aa2 / AA          1.10% 2.42% 3.63%     N/A     N/A
08/18 $    157 mln SCPPA Milford Wind Corridor revenue      AA-        1.22% 2.74% 3.72% 4.14%     N/A
08/17 $      69 mln Southern Calif. Water Replenish. COPs      AA+        1.40% 2.96% 4.22% 4.65% 5.00%
08/17 $      10 mln Mojave Unified School Dist. G.O. Bonds  A+ / AA-     AGM      1.85% 3.28% 24:4.12     N/A     N/A
08/17 $        8 mln Roseville High School Dist. G.O. Bonds       AA-       1.35% 2.78% 3.83%     N/A     N/A
08/16 $    960 mln California D.W.R. power supply bonds  Aa3 / AA-          18:1.92 2.66%     N/A     N/A     N/A
08/16 $    109 mln Cucamonga Valley Water  rev. bonds   Aa3 / AA-     AGM      1.20% 2.66% 3.83% 4.25% 35:4.50
08/16 $        8 mln Aromas-San Juan School G.O. Bonds        A     AGM      1.90% 3.36% 23:3.74     N/A     N/A
08/16 $        5 mln Lake County PFA wastewater rev. bonds      BBB      3.00% 4.50% 5.25%  5.70% 40:6.00
08/11 $    307 mln Los Angeles DWP water rev. bonds   Aa2 / AA      17:1.44 2.56% 3.60%  4.05% 4.30%
08/11 $      86 mln West Contra Costa School G.O. Bonds   Aa3 / A+     AGM   1.97% 3.45% 24:4.11     N/A     N/A
08/05 $        2 mln Wasco Union School Dist. G.O. Bonds       A+     AGM      2.00% 20:3.29     N/A     N/A     N/A
08/04 $    346 mln Port of Oakland revenue bonds A2 / A / A+        2.55% 4.13% 4.95% 5.20%     N/A
08/04 $    350 mln Ventura (Memorial Health revenue bonds)  Ba2 / BB        5.11% 6.62% 7.20% 7.40% 7.65%
08/03 $      30 mln Coast Community College lease revenue  Aa3 / A+        2.51% 4.15% 5.05% 5.25% 5.62%
08/03 $        5 mln West Valley-Mission College lease rev.  Aa3 / AA-        2.41%     N/A     N/A 5.14% 36:5.52
08/03 $        7 mln Jurupa CSD CFD No. 38 Mello-Roos bond   Unrated         3.00% 4.60% 5.30% 5.75% 42:6.00
08/02 $      77 mln Sacramento County Sanitation District rev.  Aa3 / AA         N/A 22:3.20 3.77%     N/A     N/A
08/02 $      31 mln Belmont-Redwood Elem. School G.O.  Aa2 / AA         N/A 2.90%     N/A     N/A 4.95%
07/28 $      11 mln Folsom PFA CFD No. 7 Mello-Roos bonds        A-    AGM  3.05% 4.60% 24:5.12     N/A     N/A
07/27 $    207 mln Turlock Irrigation Dist. 1st sub. rev. bonds    A2 / A        1.74% 3.42% 4.35% 4.81% 5.12%
07/27 $      76 mln Imperial Irrigation Dist. electric rev. bonds   A1 / AA-        1.76% 3.38% 4.25% 4.71% 5.15%
07/27 $    140 mln San Diego County Water Auth. rev. bonds   Aa2 / AA            N/A 22:3.08 3.61%     N/A     N/A
07/26 $      33 mln San Diego County certificates part. Aa3 / AA+        1.87% 3.58% 4.39% 4.95% 42:5.33
07/22 $        8 mln Moreland School District G.O. Bonds      Aa3     1.64% 20:3.04     N/A     N/A     N/A
07/21 $    260 mln City of Los Angeles G.O. Bonds   Aa3 / AA-        1.35% 20:2.79 23:3.31     N/A     N/A
07/21 $    733 mln San Francisco PUC water rev. bonds   Aa3 / AA-        1.30% 2.93% 3.77% 4.28% 4.70%
07/21 $    125 mln Modesto Irrigation Dist. electric rev. bonds    A2 / A+        1.95% 3.56% 4.37%     N/A     N/A
07/20 $      35 mln Irvine Reassessment Dist. No. 11-1 bonds     BBB+        2.90% 4.45% 5.08%     N/A     N/A
07/19 $    117 mln City of Los Angeles G.O. Bonds   Aa3 / AA-        1.34% 2.95% 3.77% 4.23%     N/A
07/19 $      39 mln Mountain View Shoreline revenue bonds        A        3.03% 4.60% 5.32% 5.60% 40:5.85
07/15 $        5 mln Duarte Unified School Dist. G.O. Bonds      Aa3        1.59% 3.16%     N/A     N/A     N/A
07/14 $      17 mln Oak Grove School District G.O. Bonds  Aa2 / AA-        1.39% 3.00% 25:3.82     N/A     N/A
07/13 $      22 mln Glendale Unified School Dist. G.O. Bonds  Aa2 / AA        1.39% 2.96% 3.93%     N/A     N/A
07/13 $        5 mln Garvey School District G.O. Bonds    A1 / A+     AGM 1.95% 3.56% 24:4.30     N/A     N/A
07/13 $      86 mln San Jose Airport revenue bonds     A2 / A   2.26% 3.90% 4.63% 5.05%     N/A
07/13 $    150 mln San Jose Airport revenue bonds (AMT)     A2 / A AMT tax 3.01% 4.60% 5.33% 30:5.69     N/A
07/12 $      35 mln Yuba Comm. College District G.O. Bonds      Aa2      1.70% 3.33% 4.35% 29:4.65 5.37%
07/12 $        9 mln Fort Bragg School District G.O. Bonds         A     AGM     N/A 3.60% 4.58% 30:4.92 5.30%
07/12 $      87 mln San Diego County Water Auth. sub. lien   Aa3 / AA    1.48%     N/A     N/A     N/A     N/A
07/08 $      26 mln Centinela Valley High School G.O. Bonds   Aa3 / A+            N/A     N/A     N/A  5.14% 5.46%
07/07 $      13 mln Imperial Irrigation Dist. water bonds   Aa2 / AA     1.59% 3.16% 4.26% 29:4.51     N/A
07/07 $    372 mln San Diego College District G.O. Bonds Aa1 / AA+     1.46% 3.11% 4.06% 4.47% 4.86%
07/07 $      28 mln San Rafael High School G.O. Bonds  Aa2 / AA        1.48% 3.06% 4.01%      N/A     N/A
07/07 $      28 mln San Rafael Elem. School G.O. Bonds  Aa3 / AA-        1.68% 3.32% 4.24%      N/A     N/A
07/06 $      35 mln San Mateo Union High School G.O.   Aa1 / AA        15:1.14 3.06% 3.97% 4.39%     N/A
07/06 $      56 mln Eastern Municipal Water Dist. rev. bonds    Aa2 / AA     1.48% 20:2.84     N/A     N/A     N/A
07/05 $        7 mln Oxnard School District G.O. Bonds   Aa3 / A+    AGM 1.90% 3.45% 4.66%     N/A     N/A
07/01 $      57 mln Campbell Union School Dist. G.O. Bonds   Aa2 / AA-        1.50% 3.15% 4.06% 4.68%     N/A
06/30 $    124 mln San Francisco Airport revenue bonds    A1 / A+       N/A 22:3.79 4.41% 4.81%     N/A
06/30 $    164 mln San Francisco Airport revenue bonds    A1 / A+ AMT tax 19:3.91 4.38% 25:5.02     N/A     N/A
06/29 $    131 mln L.A. County Sanitation Dist. rev. bonds Aa1 / AA+     1.37% 2.91% 23:3.33     N/A     N/A
06/29 $      12 mln City of Saratoga general obligation bonds Aaa / AAA       1.37% 2.80% 3.60% 4.00%     N/A
06/29 $      11 mln Sequoia Union High School G.O. Bonds      Aa1     1.38% 19:2.47     N/A     N/A     N/A
06/28 $      50 mln Ventura College District G.O. Bonds  Aa2 / AA     1.45% 3.03% 3.93%     N/A     N/A
06/28 $      19 mln Santa Rosa High School Dist. G.O. Bonds        A+    AGM    1.70% 3.33% 4.33%     N/A     N/A
06/28 $        5 mln Santa Rosa Elem. School G.O. Bonds        A+    AGM    1.90% 3.40% 4.30%     N/A     N/A
06/28 $        8 mln Taft Elementary School Dist. G.O. Bonds        A+    AGM   2.32% 3.78%     N/A     N/A     N/A
06/28 $      13 mln Big Bear Lake Imp. tax allocation bonds        A    3.65% 5.08% 5.78% 5.90% 35:6.04
06/28 $        2 mln Grover Beach Imp. tax allocation bonds     BBB+        N/A 5.25% 6.00% 6.25% 6.50%
06/23 $      12 mln Manhattan Beach School Dist. G.O. Bonds  Aa2 / AA     1.45% 2.93% 24:3.57     N/A     N/A
06/23 $        9 mln San Bernardino Valley Water Dist. COPs     AAA     1.40% 3.00% 27:3.88 4.20% 35:4.35
06/23 $      19 mln Oxnard Development tax allocation bonds        A    3.55% 5.20% 5.90% 32:6.12 6.28%
06/22 $        5 mln Claremont McKenna College rev. bonds      Aa2    1.75% 3.33% 4.04% 30:4.17     N/A
06/22 $    145 mln San Marcos School Dist. G.O. Bonds  Aa2 / AA-         N/A 3.08%     N/A 4.78%  38:5.10
06/22 $      34 mln Chino Valley School Dist. G.O. Bonds  Aa2 / A+     1.55% 3.18% 4.14%     N/A      N/A
06/22 $      92 mln Los Angeles Harbor Dept. revenue bonds  Aa2 / AA AMT tax 2.20% 3.78%      N/A     N/A     N/A
06/22 $       6 mln Grass Valley wastewater revenue bonds       AA    1.62% 3.08% 25:3.87     N/A     N/A
06/22 $       4 mln Malibu CFD No. 2006-1 Mello-Roos bonds   Unrated    2.95% 4.40% 5.17% 5.70% 39:5.95
06/21 $     47 mln Contra Costa Water District revenue bonds  Aa2 / AA+    1.40% 2.90% 25:3.62     N/A     N/A
06/21 $     12 mln San Ramon certificates of participation       AA+    1.77% 3.33% 24:3.87     N/A     N/A
06/21 $       7 mln Pomona College rev. bonds (thru CEFA) Aaa / AAA       1.31%     N/A     N/A     N/A      N/A
06/21 $       3 mln Denair Unified School Dist. G.O. Bonds        A+    AGM  2.50% 3.98% 4.69%     N/A 5.43%
06/21 $   150 mln The Broad Collection (Calif. I-Bank) bonds       Aa1        N/A 3.13%     N/A     N/A     N/A
06/17 $     16 mln Duarte Unified School District G.O. bonds       AA-        N/A 3.09%     N/A     N/A 38:5.10
06/17 $   101 mln Puerto Rico (Hospital Auxilio Mutuo ) bonds        A-    3.80% 5.14% 5.75% 33:6.12     N/A
06/17 $     16 mln Vista Community Development TABs        A-        N/A     N/A     N/A 33:6.12 37:6.25
06/16 $   694 mln L.A. Dept. of Water & Power power bonds  Aa3 / AA-    1.49% 3.09%     N/A     N/A     N/A
06/16 $       9 mln Nevada County certificates of participation        A+    AGM   2.83% 19:3.90     N/A     N/A     N/A
06/16 $       6 mln Berryessa School District G.O. bonds       Aa2    1.50%     N/A     N/A     N/A     N/A
06/15 $       2 mln Greenfield Union School District COPs        A-    AGM 3.25% 4.62% 24:5.20 5.70% 5.97%
06/14 $     46 mln Pomona Unified School Dist. G.O. Bonds        A    2.50% 4.00% 4.90% 5.25% 40:5.40
06/14 $     21 mln Grand Terrace Redevelopment TABs        A    3.63% 22:5.24     N/A 33:6.08     N/A
06/14 $       4 mln Gonzalez Redevelopment lease bonds      BBB+    3.88% 5.61%     N/A 32:6.75 7.00%
06/14 $       1 mln San Juan Capistrano judgment obl. bonds      AA+    1.55% 3.15%     N/A     N/A     N/A
06/10 $   110 mln Sacramento School Dist. G.O. Bonds      Aa3    1.66% 3.16% 4.28% 29:4.42     N/A
06/09 $   170 mln MWD Southern Calif. water revenue bonds  Aa1 / AAA    1.20% 20:2.46     N/A     N/A     N/A
06/09 $     22 mln Oxnard lease revenue bonds        A+   AGM 2.90% 4.30% 25:5.00 5.45%     N/A
06/09 $       3 mln Forestville Elementary School G.O. bonds        A1   AGM 2.28% 4.02% 4.71% 32:5.07  36:5.25
06/09 $     40 mln Westminster Redevelopment Agency TAB        A    3.53% 22:5.13 5.62% 31:5.79 6.05%
06/09 $   172 mln Santa Clara School Dist. G.O. Bonds       AA    1.45% 2.85% 4.00% 4.50% 35:4.72
06/08 $     75 mln Imperial Irrigation Dist. electric rev. bonds    A1 / AA-    1.96% 3.50% 4.26% 4.71% 5.06%
06/08 $     53 mln Carlsbad Unified School Dist. G.O. Bonds  Aa2 / AA    1.47% 2.93% 3.99%     N/A     N/A
06/08 $      5 mln Little Lake City School Dist. G.O. Bonds      AA-    1.70% 3.32% 27:4.43     N/A     N/A
06/08 $      2 mln South Coast Water District G.O. bonds AA+ / AAA    1.61%     N/A     N/A     N/A     N/A
06/08 $  188 mln Stanford Hospital remarketing bonds  Aa3 / A+    2.39% 3.81%    N/A     N/A    40:5.30
06/07 $    38 mln Mt. Diablo Unified School Dist. G.O. Bonds      Aa3    1.60% 3.05% 4.26%     N/A     N/A
06/07 $    26 mln Atascadero Unified School Dist. GO Bonds      Aa3    AGM 1.60% 3.15% 4.25% 4.75% 40:5.20
06/03 $    41 mln Santa Monica Redevelop. Agency TAB   AA / AA-        N/A     N/A     N/A 32:5.05 42:5.36
06/03 $      5 mln Mayers Memorial Hospital Dist. GO Bonds     BBB-     13:5.50     N/A     N/A     N/A 8.00%
06/02 $      3 mln Sonora Elementary School Dist. GO Bonds        A+    AGM 2.68% 4.15%     N/A     N/A 5.60%
06/02 $    69 mln Southwestern College District G.O. Bonds  Aa2 / AA-    1.75% 3.20% 4.30% 30:4.70 40:5.17
05/26 $    13 mln Walnut Valley School District G.O. Bonds  Aa2 / AA-    1.65% 3.14% 4.25%     N/A 5.25%
05/25 $    75 mln Palm Springs School District G.O. Bonds       AA-    1.65% 3.19% 4.21% 4.67%     N/A
05/26 $    13 mln West Sacramento Flood Control rev. bonds    A / AA-    2.10% 3.45% 4.50%     N/A 5.46%
05/25 $    13 mln Moorpark Mobile Home Revenue Bonds      BBB    17:4.90 22:5.25 6.00% 6.40% 6.75%
05/24 $    10 mln Mountain House P.F.A. Utility Bonds        A-    3.24% 4.64% 5.40% 5.85% 35:6.05
05/24 $    12 mln Downey School District G.O. Bonds       AA-    1.72% 3.34% 4.27% 4.75%     N/A
05/20 $      6 mln Magnolia School District G.O. Bonds      Aa3    2.19% 3.64% 24:4.21 5.00%     N/A
05/19 $    72 mln Stockton Unified School District G.O. Bonds    A2 / A    AGM   2.72% 4.09%     N/A     N/A     N/A
05/19 $    16 mln Eureka P.F.A. wastewater revenue bonds      AA-    1.92% 3.29% 4.26% 4.74% 5.16%
05/19 $      7 mln Coast Unified School District G.O. Bonds      Aa3    1.85% 3.42% 23:3.77     N/A     N/A
05/19 $  184 mln Foothill - De Anza College G.O. bonds  Aaa / AA        N/A     N/A     N/A 36:4.73 40:4.78
05/19 $      8 mln Jurupa Comm. Services CFD No. 15   Unrated    3.37% 5.00% 5.85% 6.35% 42:6.70
05/18 $    43 mln Los Angeles County lease-revenue bonds      Aa3    2.14% 3.79% 4.66% 30:4.93 42:5.50
05/18 $    25 mln Tustin Unified School District G.O. Bonds  Aa2 / AA    1.52% 3.17% 4.25% 4.75% 36:4.90
05/18 $    53 mln Marin Community College G.O. bonds  Aa1 / AA    1.67% 3.11% 4.14% 4.61% 34:4.75
05/18 $    17 mln Soquel Creek Water District COPs       AA        N/A 3.25% 4.30% 4.80% 36:5.00
05/13 $    31 mln Bonita Unified School District G.O. Bonds  AA- / AA    15:1.49     N/A 4.59% 28:4.74 37:5.40
05/12 $    40 mln Grossmont High School District G.O. Bonds  Aa2 / AA-        N/A 22:3.51 4.39% 4.87% 36:5.20
05/12 $    15 mln Madera County Board of Education COPs       A-    3.05% 4.50% 5.37% 5.87% 6.25%
05/12 $    23 mln San Luis Obispo County (Lopez Dam)       A+    AGM  2.25% 3.70% 4.61% 30:5.10     N/A
05/11 $    21 mln Tustin P.F.A. water revenue bonds      AA        N/A     N/A 4.16% 4.64% 5.09%
05/11 $    11 mln Los Gatos Union School District G.O. bonds      AA+    1.50%     N/A 3.90% 4.40% 35:4.75
05/11 $    11 mln Alameda Community Improvement TABs       A-        N/A 5.74% 5.96%     N/A     N/A
05/11 $    31 mln Santa Clara Redevelopment Agency TABs       A    12:1.75     N/A 5.90%     N/A     N/A
05/10 $    15 mln Harvey Mudd College (CEFA) rev. bonds      Aa3    2.39% 3.75% 4.52% 4.97%  5.37%
05/10 $    30 mln San Leandro School District G.O. bonds  Aa3 / A+    2.40% 3.75% 4.50% 5.00%  5.25%
05/10 $      8 mln City of Arcadia general obligation bonds      AA+   1.70% 3.09% 3.75% 4.20%     N/A
05/10 $    10 mln Berkeley Unified School District G.O. bonds      AA-    AGM     N/A     N/A     N/A 5.00% 35:5.37
05/10 $    13 mln Kaweah Delta Health Care Dist. rev. bonds       A3    18:3.90 4.62% 27:5.50     N/A     N/A
05/06 $    30 mln Beaumont School District G.O. bonds       A1    AGM     N/A     N/A 4.96% 5.39%  5.65%
05/06 $    20 mln Yorba Linda Redevelopment Agency TABs        A-    4.54% 5.80% 6.05% 32:6.50     N/A
05/06 $    72 mln California Housing Agency mortgage bonds      Aaa    2.45% 3.87% 28:4.75     N/A     N/A
05/05 $      2 mln Mayers Memorial Hospital District COPs    Unrated    5.80% 19:6.54 7.82% 30:7.93     N/A
05/05 $    21 mln Midpeninsula Regional Open Space bonds  AA- / AA    2.55% 4.10% 4.90% 29:5.15  5.70%
05/05 $    11 mln Buckeye Union School District COPs       A+    AGM 2.75% 4.00% 5.00% 5.50% 38:5.75
05/04 $    10 mln Ross Valley School District G.O. bonds  AA- / AA+    18:2.60 3.45% 4.62% 5.12%  5.54%
05/04 $    10 mln College of the Sequoias G.O. bonds       A+    AGM 19:3.89 4.26% 5.09% 5.53%     N/A
05/03 $    28 mln Placentia - Yorba Linda School Dist. COPs       A+    AGM 3.15% 4.50%     N/A     N/A     N/A
05/03 $      5 mln Roseville High School SFID #1 G.O. bonds       A+    AGM     N/A 23:4.62 5.07% 32:5.55 5.85%
05/03 $    15 mln San Francisco Finance lease-revenue bond   A1 / AA-    2.20%     N/A     N/A     N/A     N/A
04/29 $    28 mln Gavilan Community College G.O. bonds  Aa2 / AA-    1.93% 3.37% 4.52% 5.05% 35:5.36
04/28 $    32 mln San Mateo sewer revenue bonds  Aa2 / AA    1.88% 3.34% 4.27% 4.83% 5.25%
04/28 $      6 mln Placentia (CSCDA) gas tax revenue COPs        A    AGM 3.31% 4.66% 5.41% 5.77%     N/A
04/28 $      2 mln Greenfield School District CFD No. 2005-3   Unrated    4.10% 5.35% 6.10% 6.60% 40:6.85
04/27 $      6 mln Jefferson School District G.O. bonds     AA-    2.20% 3.56% 4.71%     N/A 40:5.68
04/27 $    31 mln Monterey Peninsula Community Hospital   A+ / AA-       3.37% 4.78% 5.50% 33:6.10     N/A
04/27 $      8 mln Saugus School District CFD No. 2006-2   Unrated    4.12% 5.45% 6.25% 6.75% 7.00%
04/26 $    90 mln Anaheim P.F.A. electric revenue bonds   A1 / AA-     2.45% 3.82% 4.59% 5.12% 36:5.40
04/26 $    10 mln Atwater P.F.A. wastewater revenue bonds       A    AGM   3.32% 4.70% 5.45% 5.80% 45:6.22
04/21 $    20 mln San Diego County certificates participation      AA+    2.47% 19:3.56     N/A     N/A     N/A
04/21 $    33 mln Wiseburn School District G.O. bonds   Aa3 / A+    AGM     N/A     N/A     N/A 5.45% 5.80%
04/20 $    11 mln Long Beach School District G.O. bonds      Aa2    17:2.40     N/A 24:4.38     N/A     N/A
04/19 $    12 mln Twentynine Palms Redevelopment TABs     BBB+    5.25% 6.85% 7.30% 32:7.65 42:7.85
04/19 $    16 mln San Francisco Redevelopment TABs       A1        N/A     N/A 6.18% 6.35% 6.62%
04/14 $    26 mln Sequoia Union High School G.O. bonds      Aa1    2.12% 3.67% 4.56% 5.01% 43:5.47
04/13 $    13 mln Lincoln Glen Manor (thru CMFA) revenue   A1 / A- Cal-Mort 3.84% 5.32% 5.75% 6.00% 36:6.25
04/13 $    34 mln M-S-R Public Power Agency revenue bonds        A   3.10% 18:3.84     N/A     N/A     N/A
04/13 $    91 mln Guam E.D.A. hotel tax revenue bonds     BBB+   4.62% 5.87% 6.12% 6.37% 40:6.62
04/12 $    32 mln Madera Irrigation Financing water revenue        A-   3.79% 5.27% 6.00% 6.45% 40:6.80
04/12 $      8 mln Monrovia Redevelopment Agency TABs        A-   4.80% 6.15% 6.72% 36:7.08     N/A
04/12 $    11 mln Cudahy Community Development TABs (B)    Unrated   6.40% 7.60% 27:8.00      N/A     N/A
04/07 $      5 mln Glendale Comm. College Dist. G.O. bonds      Aa2   18:3.12 3.89% 4.85% 30:5.25     N/A
04/07 $      6 mln Town of San Anselmo G.O. bonds       AA   2.20% 3.63% 25:4.55     N/A     N/A
04/07 $    13 mln City of Benicia energy COPs        A+    AGC  3.50% 22:5.00 5.60%     N/A 36:6.00
04/07 $    17 mln Franklin-McKinley School Dist. G.O. bonds    A1 / A+    AGM     N/A 4.75% 23:5.06     N/A 35:6.02
04/07 $    28 mln Emery Unified School District G.O. bonds   Aa3 / A+    AGM     N/A     N/A 5.30% 5.75% 35:6.00
04/07 $    22 mln Cypress Elem. School District G.O. bonds    A+, AA        N/A     N/A 27:5.25     N/A     N/A
04/06 $    28 mln San Lorenzo School District G.O. bonds        A+    3.50% 4.50% 5.05% 5.37% 6.00%
04/05 $      6 mln City of Redwood CFD 2010-1 special tax   Unratd   5.50% 6.75% 24:7.37  7.50% 7.75%
04/01 $    18 mln Millbrae School District G.O. bonds  Aa2 / AA-    2.35% 3.85% 29:5.20 34:5.55 5.70%
03/31 $    67 mln South Placer Wastewater Auth. revenue   Aa3 / A+   2.67% 4.07% 25:4.67     N/A     N/A
03/31 $    30 mln Anaheim City School District G.O. bonds   Aa3 / A+    AGM 14:1.50 23:4.50 4.96% 33:5.58 40:5.78
03/30 $  107 mln San Jose special hotel tax revenue bonds     A2 / A-   3.74% 5.11% 5.87% 6.31% 42:6.73
03/30 $    31 mln San Jose Financing Auth. lease revenue  Aa2 / AA+   2.72% 4.38% 5.15% 5.61% 42:6.00
03/28 $    52 mln Azusa Pacific Univ. revenue bonds (CMFA)    Unrated       N/A     N/A     N/A 7.75% 8.00%
03/25 $      7 mln Lucia Mar Unified School District COPs       A1    AGM  15:3.25     N/A     N/A 30:5.79     N/A
03/24 $      5 mln Upland Unified School District G.O. bonds      Aa2   2.32% 3.69% 25:4.45     N/A     N/A
03/23 $      8 mln Quartz Hill Water District COPs       AA-   3.50% 4.75% 24:5.20 5.60% 5.90%
03/23 $    41 mln Whittier (Presbyterian Health Bonds)        A+   18:4.07 4.75% 4.90% 6.10% 36:6.50
03/23 $    17 mln Novato Redev. Agency TABs (Hamilton) Baa1 / A-   4.65% 5.95% 6.55% 32:6.75 40:6.90
03/23 $      9 mln Signal Hill Redevelopment Agency TABs     5.60% 6.84% 7.27%      N/A      N/A
03/23 $      3 mln WateReuse Finance Authority (Vallejo)      AA-   2.83% 4.33% 25:5.00     N/A     N/A
03/22 $    28 mln Liberty Union High School District G.O.      Aa2   2.07%  3.43% 4.30% 28:4.50     N/A
03/21 $      9 mln Claremont University Consortium ( CEFA)      Aa3   2.60%  3.85% 28:4.87 35:5.41     N/A
03/17 $    36 mln San Francisco Redev. TABs (Mission South)     BBB   5.07%  6.30% 27:6.90 33:7.11 7.18%
03/17 $    27 mln San Francisco Redev. TABs (Mission North)        A-   4.82%  6.05% 27:6.62 33:6.80 6.86%
03/16 $    13 mln Riverside County Redevelop. TABs (I-215)     BBB+      N/A  7.00% 7.35% 7.65% 40:7.85
03/16 $      5 mln Lemon Grove School District G.O. bonds       AA-    2.36%  3.60% 28:5.04     N/A     N/A
03/16 $      6 mln Riverside County Redevelop. TABs (Desert)     BBB+   13:4.25  6.75% 7.00% 7.25% 37:7.45
03/16 $    15 mln Kern County certificates of participation        A+    3.34% 19:4.10      N/A     N/A     N/A
03/16 $    44 mln San Francisco Redevelopment hotel tax    A1 / A+    AGM   3.25%  4.40% 25:5.20     N/A     N/A
03/15 $    35 mln Riverside County Redevelop. TABs (Jurupa)        A-      N/A  6.20% 25:6.75 30:6.93     N/A
03/11 $    70 mln Fremont Union High School District G.O.      Aa1   13:0.97     N/A     N/A     N/A 44:5.50
03/10 $  442 mln Puerto Rico general obligation bonds  A3 / BBB 26:AGM     N/A    N/A 5.38% 32:6.00 40:6.25 
03/10 $    11 mln Kern County solid waste revenue COPs       AA+   2.40%     N/A     N/A     N/A    N/A 
03/09 $      7 mln Bennett Valley School District G.O. bonds  Aa3 / AA-   2.51%  3.80% 4.83% 32:5.38     N/A
03/08 $    55 mln Santa Clara electric revenue bonds        A       N/A     N/A 28:5.27 5.38%     N/A 
03/08 $      8 mln Ukiah Redevelopment tax allocation        A    4.86%  6.10% 28:6.83     N/A     N/A
03/07 $    19 mln University of San Diego revenue bonds       A2    3.15%  4.31%    N/A      N/A     N/A 
03/07 $      2 mln Greenfield School Dist. CFD 1 Mello-Roos    Unrated    4.10%  5.35% 6.10% 6.60% 40:6.85
03/07 $    24 mln Lynwood Redevelopment tax allocation        A-    5.10%  6.25% 7.00% 31:7.18 38:7.38
03/04 $    11 mln Oxnard Elem. School District G.O. bonds     Aa3    2.51%  3.71% 23:4.38     N/A     N/A
03/03 $    16 mln Goleta Redevelopment tax allocation   Unrated    5.75%  7.00% 7.65% 7.90% 44:8.15
03/03 $      3 mln Coast Unified School District G.O. bonds     Aa3    2.91%  4.00% 23:4.35     N/A     N/A
03/02 $    30 mln Union City Redevelopment tax allocation       A    4.91%  6.00% 6.81% 33:6.95     N/A
03/02 $    31 mln West Hollywood Develop. tax allocation      BBB    5.25%  6.50% 7.12% 7.35% 42:7.60
03/02 $    32 mln Santee Redevelopment tax allocation       A    4.91%  6.12% 6.81% 7.00% 7.20%
03/01 $    19 mln Lemoore Redevelopment tax allocation       A-    5.01%  6.42% 24:7.02 7.41% 40:7.64
03/01 $    17 mln Temecula Redevelopment tax allocation       A    4.75%  6.00% 6.85% 6.95% 39:7.20
03/01 $    16 mln Sonoma Development tax allocation       A+    5.15%  6.25%     N/A     N/A    N/A 
03/01 $    18 mln Davis Redevelopment tax allocation       A+       N/A     N/A 6.80% 36:7.25    N/A 
02/28 $    40 mln National City Development tax allocation       A-    5.01%  6.24% 24:6.84 32:7.26    N/A 
02/28 $    14 mln Galt Redevelopment Agency tax allocation    BBB+       N/A     N/A 7.25% 33:7.60    N/A 
02/25 $    41 mln Cupertino Union School Dist. G.O. bonds      Aa1   2.00% 3.28% 4.47%     N/A    N/A
02/25 $    19 mln Antelope Valley Healthcare Dist. revenue   Baa3 (?)       N/A     N/A 6.87%  7.25 36:7.50
02/24 $      8 mln Northern Humboldt High School GO bonds      Aa3   3.00% 4.41% 5.24% 5.66%     N/A
02/23 $  137 mln Grossmont Healthcare District G.O. bonds      Aa2   2.77% 4.18% 5.08% 5.65% 40:5.86
02/22 $    33 mln March Joint Powers Redevelopment TABs     BBB+   5.40% 6.75% 7.25% 7.50% 7.75%
02/17 $    17 mln Sacramento County CFD No. 1 (Laguna)    Unrated   4.00%  20:5.10    N/A     N/A    N/A 
02/16 $    78 mln Imperial Irrigation Dist. electric revenue   A1 / AA-   2.81% 4.33% 5.20% 5.29% 5.83%
02/16 $    13 mln Burbank Unified School District G.O.     Aa2   14:1.58     N/A     N/A     N/A    N/A 
02/15 $    19 mln Woodland Finance Agency water revenue      AA-   3.20% 4.65% 5.50% 29:5.80 6.15%
02/11 $      9 mln Reedley Redevelopment Agency TABs       A-   5.10% 6.50% 6.87% 7.25% 7.50%
02/10 $      6 mln Fairfax Elementary School District G.O.   A+ / AA-  AGMuni    N/A  20:4.20 5.40%    N/A  40:5.95
02/10 $    77 mln CHFFA (Program for Develop. Disabled)     A1 / A-  Cal-Mort 4.09% 5.58% 6.25%    N/A     N/A 
02/09 $  212 mln San Joaquin Transportation sales tax rev.   Aa3 / AA   2.39% 4.10% 5.04% 5.52% 5.75%
02/09 $      8 mln Piner-Olivet Elementary School Dist. G.O.      Aa3   2.75% 4.30% 25:5.12 30:5.55 38:5.80
02/02 $    80 mln University of San Francisco (CEFA) revenue        A3   3.72% 5.20%      N/A 30:6.15      N/A
01/28 $      3 mln San Bernardino JPFA tax allocation bonds      BBB        N/A 20:6.15 28:7.15      N/A      N/A
01/27 $    15 mln Turlock Public Finance Auth. tax allocation      BBB+    5.20% 6.65% 25:7.10 29:7.30 39:7.55
01/27 $   105 mln Hoag Memorial Hospital (Newport Beach)  Aa3 / AA     3.26% 4.82%      N/A 30:5.90 40:6.07
01/27 $      5 mln Sylvan Union High School Dist. G.O. bonds       Aa3    2.66%      N/A     N/A      N/A     N/A 
01/26 $  475 mln Sutter Health (CHFFA) health revenue bond Aa3 / AA-    3.45% 4.92% 5.70% 6.02% 42:6.20
01/26 $      6 mln San Mateo JPFA flood control bonds       AA   3.31% 4.87% 25:5.49 29:5.89     N/A
01/26 $    11 mln Shasta Union High School Dist. G.O. bonds       AA-    2.80% 4.26%     N/A      N/A     N/A 
01/26 $    15 mln Santa Ana Redevelopment tax allocation     A / A+   17:4.80 22:6.13 24:6.45 28:6.75      N/A
01/25 $       5 mln Chino Hills CFD No. 9 Mello-Roos bonds        A-   3.70% 5.25%      N/A      N/A      N/A
01/25 $      6 mln Lake Elsinore PFA tax allocation bonds        A    5.70% 6.50%     N/A     N/A     N/A
01/24 $    20 mln Porterville PFA sewer revenue bonds       AA       N/A 4.63% 25:5.30 29:5.90  36:6.25
01/20 $  155 mln San Francisco Airport revenue bonds (AMT) A1/ A / A+   3.74% 19:4.87     N/A     N/A      N/A
01/20 $     "   " San Francisco Airport rev. bonds (non-AMT) A1/ A / A+   3.05% 4.66     N/A     N/A      N/A
01/20 $     8 mln Santa Rosa Assess. bonds (Fountaingrove)    Unrated   4.35% 19:5.30      N/A      N/A      N/A
01/20 $  197 mln SCPPA transmission project bonds (sub.)       AA-   2.78% 19:3.80     N/A      N/A      N/A
01/19 $   0.6 mln Westmorland Redevelopment Agency TAB    Unrated   5.41% 6.38% 7.25%      N/A     N/A
01/19 $      5 mln Porterville Irrigation District revenue COPs        A   3.88% 5.47% 6.32% 6.84% 7.8%
01/19 $    13 mln Sacramento County CFD No. 1 bonds        A   4.10% 5.40%     N/A      N/A     N/A
01/18 $     6 mln Ross Valley School District G.O. bonds  AA- / AA+   2.48% 20:3.8     N/A      N/A      N/A
01/18 $     8 mln Larkspur School District general obligation     AAA   2.08% 3.71% 25:4.30      N/A     N/A
01/13 $ 143 mln Hillsborough City School Dist. G.O. bonds      AAA   13:1.00     N/A     N/A     N/A 44:5.38
01/12 $   78 mln Sharp Healthcare (ABAG nonprofit) bonds       A2   3.53% 22:5.15  24:5.48 30:6.13     N/A
01/12 $      4 mln Clovis Unified School District COPs      AA-   3.70% 5.17% 25:5.70      N/A      N/A
01/12 $  125 mln San Antonio Hospital (Upland) COPS        A   3.75% 5.22% 6.20 32:6.63 6.75%
01/06 $    36 mln Dublin San Ramon Services water revenue     A / AA   3.00% 4.47% 5.20%  32:5.65 5.82%

Weekly Summary: A Few New Deals As December Slowdown Nears

(Dec. 16, 2011) -- The municipal bond market is already getting into the end-of-the-year slowdown, even before the traditional quiet time from Christmas to New Year’s Day. New-issue activity in California dropped off this week and next week won’t see much activity either. One reason there isn’t a big year-end rush? Issuers don’t feel compelled to get deals done because low interest rates will still be available in January, based on current market conditions. Tax-exempt yields didn’t change much this week and U.S. Treasury rates dropped just a small amount.

In our preview of this week’s sales, we called Pasadena’s $30 million of water revenue refunding bonds a “benchmark” deal because it would show where a higher-quality issue is priced. Indeed, the AA and AA+ bonds provided the yields we would expect in the current market. A five-year bond yielded a tax-exempt 1.05%. This bond matures in June 2016 so maybe we should call it a four-and-a-half-year bond. The bond due in June 2017 yielded 1.20%. The bond maturing in June 2021 had a 5% coupon and was priced to yield about 2.12%. The 2026 maturity yielded 3.19% and the 2031 maturity, 3.74%.

The Kentfield School District sold $10 million of double-A general obligation refunding bonds this week. A bond due in August 2016 yielded a tax-exempt 1.20%. The 2021 maturity yielded 2.17%. The 15-year bond, due in 2026, yielded 3.19%. Other school district bonds on our calendar also priced this week.

The Gateway Unified School District sold $8 million G.O. refunding bonds with a single-A rating and Assured Guaranty Municipal backing. The five-year bond yielded 2.15% and the 10-year, 3.42%. The 13-year bond yielded 4.01%. The Lindsay Unified School District sold $3 million G.O. refunding bonds (A+), also with AGM insurance. The five-year bond yielded 2.05% and the 10-year, 3.32%.

The California Statewide Communities Development Authority brought a $95 million deal of student housing revenue bonds (University of California Irvine, East Campus Apartments, Phase One Refunding). The deal is on behalf of privatized on-campus student housing for U.C. Irvine. Moody’s Investors Service rates the bonds Baa2. A bond due in May 2017 yielded 3.10% and a bond due in May 2021 yielded 4.10%. A bond due in May 2031 yielded about 5.12%.

Puerto Rico port revenue bonds also priced this week. The portion not subject to the federal alternative minimum tax included a yield of about 4.80% in 15 years, though we haven’t check on the final pricing.

Weekly Summary: 2.06% in 10 Years, a Benchmark an Issuer Loves

(Dec. 9, 2011) -- Tax-exempt municipal bonds posted another decent week as rates on some generic measurements fell to levels last seen almost three months ago. Yields on decent quality, longer-term general obligation bonds dropped as much as two-tenths of a percentage point this week. Tax-exempt rates fell on other maturities and types of securities, though not as much. The attractive rates continue to spur refinancing of older bonds; few issuers could keep up with one triple-A school district, though, as it brought a refunding this week that yielded only 2.06% in 10 years. U.S. Treasury bond yields also were lower this week, though the decline was close to one-tenth of a percentage point. The ratio of tax-exempt yields to Treasuries has dropped to more “normal” levels after municipal bonds outperformed Treasuries in recent weeks.

A decent variety of deals priced this week, even though some were quite small. The deal of the week, at least from an issuer’s standpoint, has to be the $36 million general obligation refunding bond sale by the Tamalpais Union High School District. Standard & Poor’s rates the bonds AAA, citing among other things the wealthy and diverse tax base. The district, named after nearby Mount Tamalpais, serves an area in Marin County just a few miles north of the Golden Gate Bridge. The refunding had been on our calendar for quite a while and the district pulled the trigger at the right time from an issuer’s standpoint. A five-year bond (due in August 2016) featured a 5% coupon and was priced to yield a tax-exempt 0.98%. (If you want to use the February 2017 maturity as your five-year benchmark, the district’s bond yielded 1.05%. Several earlier maturities featured August and February due dates). The 10-year bond, due in August 2021, yielded 2.06%. A 15-year maturity yielded 3.05%. The longest maturity in the deal, 2028, yielded 3.28%. Those are interesting benchmarks on where the market is for a high-quality bond sale; great for the issuer, not so great for investors.

For a yield contrast, look at the $7 million Aa2 and A+ general obligation refunding bond sale by the Shasta-Tehama-Trinity Joint Community College District. Those bonds also mature in August of their respective due dates. The five-year maturity (2016) yielded a tax-exempt 1.77% and the 10-year, 3.07%. So the Tamalpais district paid about the same in 15 years as the Shasta college district yielded in 10 years. The college district’s 15-year bond yielded 3.94%.

How about yields if you go a little lower on the rating scale? The Southern Humboldt Joint Unified School District sold $5 million of general obligation bonds with A1 and A+ credit ratings. They also mature in August of their respective due dates. The five-year bond (2016) yielded 2.18% and the 10-year, 3.47%. A 14-year bond yielded 4.16%. The deal also included capital appreciation bonds.

The deals above are some good examples for general obligation bond comparisons. The week also featured sales of various revenue bonds. Sutter Health, through two financing authorities, sold $347 million of revenue bonds. The shortest maturity, in seven years, yielded 2.25%. A 10-year maturity yielded 3.05%. The 15-year bond yielded 4.02% and the 20-year, 4.57%. Some “conservative” investors tend to stick with G.O. bonds. A nonprofit health bond can provide some diversity, however, and the higher risk can be offset by sticking with shorter maturities.

The Imperial Irrigation District priced $23 million of A1 and AA-minus electric system revenue bonds.  A six-year bond yielded 1.57% and a 10-year, 2.62%. Utility bonds tend to benefit from being seen as “essential-purpose” securities, one reason the yields often are lower than on other types of revenue debt.

We mentioned the $4 million Mill Valley certificate of participation sale elsewhere this week because the underlying AA+ deal also included bond insurance from Assured Guaranty Municipal. A five-year bond yielded 1.50% and a 10-year, 2.75%. The 15-year maturity yielded 3.75% and the 20-year, 4.25%. Lease structures such as COPs, even from highly-rated issuers, tend to pay a bit more than a similarly-rated G.O. bond. Los Angeles County sold lease-revenue bonds this week and paid 1.67% in five years.

There were even some lower-rated examples this week. The $52 million San Diego C.F.D. No. 2 (Santa Luz) Improvement Area No. 1 Mello-Roos special tax refunding bonds carried a BBB+ rating from Standard & Poor’s . The five-year bond yielded 2.87%; the 10-year, 4.13%; the 15-year, 4.72%, and the 19-year, 5.10%. The rating is part of the reason these bonds yielded more. In addition, a Mello-Roos bond involves certain real estate-related risks that are unique to this type of security. Even so, many Mello-Roos deals are unrated, so those that do earn credit ratings tend to demonstrate a solid track record or feature a decent security cushion.

Puerto Rico, through a financing corporation, sold $438 million lease rental (appropriation) bonds with Baa2 and BBB-minus ratings. Interest on the bonds is tax-exempt for California residents and others in the U.S. A  15-year bond yielded 4.93% and a 20-year,  5.50%.

Weekly Summary: A Variety of Deals Mark Post-Thanksgiving Week

(Dec. 2, 2011) -- The municipal bond market handled the post-Thanksgiving jump in new deals relatively well this week. Tax-exempt rates generally rose a small amount. Part of the increase probably reflected rising U.S. Treasury rates. U.S. Treasury yields were up as much as one-fifth of a percentage point this week. By that measurement, tax-exempt bonds outperformed Treasuries.

Speaking of new bond sales, our summary this week is a bit abbreviated due to a scheduling issue. Our Upcoming Sales chart and our table of recent yields (below) haven’t been updated yet to reflect this week’s activity. We will get to that later Friday or by Saturday at the latest.

The California Department of Veterans Affairs priced its home purchase revenue bonds. The deal is rated in the double-A category, higher than the state’s own general obligation bonds.  A bond due in 2028 yielded a little higher than 4.5%.

We recently previewed a bond sale by the California Municipal Finance Authority on behalf of Emerson College, a Boston-based institution that is building a facility in Los Angeles. The bonds are rated Baa1 and BBB+. This week’s pricing produced a tax-exempt yield of around 5.1% in 2028. A bond due in 2042 yielded a bit more than 5.5%.

Cedars-Sinai Medical Center also priced revenue refunding bonds through the California Health Facilities Financing Authority. These bonds are rated A2 and A+. A 10-year maturity in that deal yielded just a shade under 3.47%.

The Puerto Rico $1 billion senior sales tax bond sale we mentioned previously also priced this week. The bonds, falling in the double-A category, qualify as federally and state tax-exempt for California residents. A 10-year maturity yielded 3.22%. A 15-year bond yielded 4.06%. A 20-year bond yielded 4.55%.

The Chula Vista Elementary School District sold certificates of participation with Assured Guaranty Municipal backing. They are rated A+ if the insurance backing isn’t considered. A five-year COP yielded 1.65% and a 10-year, 3.15%. A 15-year bond yielded 4.25% and a 20-year 4.70%.

A few other deals have priced this week and we will probably run a separate summary later to mention some yield examples.

Weekly Summary: One Sale Dominates Before Thanksgiving Pause

(Nov. 23, 2011) -- A short week ahead of the Thanksgiving break saw tax-exempt yields stay steady or drop a bit. We’re publishing our weekly summary early on Wednesday because the biggest new-issue pricing is wrapped up for the state’s public works deal.

To the extent tax-exempt yields keep following U.S. Treasury rates, prospects for the rest of the year suggest municipal bond yields will stay steady or even drop a little more. The U.S. Treasury market keeps benefiting from concern over government bonds in Europe. A sluggish U.S. economy also has helped keep fixed-income rates low. One thing that could test tax-exempt yields would be a surge in year-end supply of new sales. On the other hand, municipal bond funds have money to put to work and muni bond reinvestment income also needs to go somewhere.

The California State Public Works Board sold $295 million of lease revenue bonds this week, giving an otherwise slow few days something to note. As we noted the other day, the sale benefited the University of California and carried double-A ratings. That translated into lower yields than other recent Public Works Board sales with A2 and BBB+ ratings.

This week’s sale carried 4% and 5% coupons on the five-year bond, which was priced to yield 1.64%. The 10-year bond was priced to yield 3.06%. The 15-year bond yielded 3.91% and the 20-year, 4.37%. A lower-rated Public Works Board sale earlier in November yielded at least one full percentage point higher on some of those earlier maturities.  

Mix of New Sales Keeps Market Going Prior to Thanksgiving Pause

(Nov. 18, 2011) -- The Europe debt crisis continues to hover in the background as a factor affecting U.S. fixed-income markets. U.S. Treasury bonds have benefited from the concern as a safe haven. This week the 10-year and 30-year Treasury yields dropped roughly one-tenth of a full percentage point. Tax-exempt bonds generally moved in the opposite direction, with yields rising a bit. In the new-issue market, California saw a good mix of new municipal bond sales even if some of the deals were small in size. New pricings will drop off next week as Thanksgiving nears.

The Southern California Public Power Authority priced $62 million of revenue refunding bonds for Magnolia Power Project A. They are rated A1 and AA-minus. A five-year bond yielded a tax-exempt 1.66% and a 10-year, 2.95%.

Guam sold $235 million of business privilege tax bonds that we discussed recently. The bonds are noteworthy because they earned A and A-minus ratings from Standard & Poor’s and Fitch Ratings, respectively. The dedicated-tax security gave the bonds a far higher rating than Guam’s general obligation debt. A five-year bond yielded a tax-exempt 2.48%, a 10-year bond yielded a tax-exempt 3.68%, and a 15-year, 4.48%. The 19-year bond yielded 4.75% and the 30-year, 5.03%. A note of explanation—the bonds are due on January 1 so the 10-year bond we cite matures Jan. 1, 2022. That’s much closer to a 10-year bond than an 11-year maturity. We do the same for other example maturities as well. The Guam bonds are federal and state tax-exempt for California residents.

Most of the $398 million Puerto Rico Sales Tax Financing Corp. bond sale we previewed recently was packed into a single 32-year maturity. The tax-exempt bonds with a coupon of 5% were priced to yield 5.10%. The subordinate sales tax bonds are rated A1 and A+.

The California Municipal Finance Authority sold $11 million of revenue bonds on behalf of the Family HealthCare Network. The bonds are insured under the Cal-Mortgage program, giving them a rating equivalent to California’s general obligation grade. A five-year maturity yielded 2.60% and a 10-year, 4.00%. A 15-year bond yielded 4.75% and an 18-year, 5.00%. A 30-year maturity yielded 5.625%. The California Municipal Finance Authority also sold $13 million of lease revenue bonds on behalf of the Sacramento Metropolitan Fire District. They carry an AA-minus rating. A five-year maturity yielded 2.46%; a 10-year, 3.85%; a 15-year, 4.68%, and a 30-year, 5.27%.

The Lake Elsinore Public Financing Authority sold $1.4 million of revenue bonds (1996 Series E refunding). The five-year bond yielded 3.75% and the 10-year, 5.125%. The 15-year maturity yielded 5.50%. The bonds were not rated.

The Merced Union High School District sold $30 million of general obligation bonds. They were capital appreciation bonds rather than current-interest bonds, carrying an Aa3 credit rating. A couple sample yields included 4.75% in 10 years and 5.97% in 16-years. About $5 million of the sale came as 40-year bonds due in 2051 rather than the usual longest maturity of 30 years. The 2051 maturity yield was 7.42%.

The Pacific Grove Unified School District sold $5 million general obligation refunding bonds (rated AA) with a tax-exempt 1.90% yield in seven years and 2.73% in 10 years. The 15-year bond yielded 3.83% and the 20-year, 4.30%.

The Perris Union High School District sold $42 million of unrated special tax Mello Roos bonds with tax-exempt yields of 3.50% in five years, 4.75% in 10 years, 5.45% in 15 years, 5.85% in 19 years, and 6.15% in 30 years.

The California Municipal Finance Authority sold $5 million of revenue refunding bonds on behalf of St. John’s Well Child & Family Center. These bonds are insured by the Cal-Mortgage program, giving them ratings on par with state general obligation bonds. The 10-year tax-exempt bond yielded 4.00%, the 20-year, 5.375% and the 30-year, 5.65%.

There were a handful of other sales going on this week that we haven’t yet chased down the final yields. For example, the William S. Hart Union High School District offered general obligation bonds that had been on our calendar for some time. The sale included a mix of current-interest and capital appreciation bonds. For the current-interest bonds, with regular semiannual interest payments, the five-year bond looked to be yielding in the neighborhood of 1.75% and the 10-year, somewhere around 3%. The bonds are rated Aa2 and A+.

Italy Helps U.S. Bonds; San Francisco a Benchmark for New Sales

(Nov. 10, 2011) -- For the second straight week, we’re posting our summary of new-issue activity a day early. This time, however, it is because of the holiday-shortened week. Veterans Day is marked on Friday. The story driving rates so far this week is once again coming out of Europe, with Italy’s financial problems in the spotlight. U.S. Treasury bond yields dropped as investors favored safer securities; the rally also helped municipal bonds and tax-exempt rates followed lower on Wednesday. Thursday might end up being a quieter day ahead of the holiday, at least for municipal bonds.

San Francisco led California’s new-issue activity this week with a $336 million general obligation bond refunding. The city and county took competitive bids Wednesday for the bonds, and the deal provides a benchmark of sorts for a higher-quality sale. Moody’s Investors Service rates the bonds Aa2, Standard & Poor’s, AA, and Fitch Ratings, AA-minus. The bonds mature on June 15 of their respective due dates. The bond due in 2021 yielded a tax-exempt 2.49%. The 15-year bond (2026) yielded 3.58%. The five-year maturity wasn’t reoffered but we believe the yield ended up in the neighborhood of 1.35%.

The West Contra Costa Unified School District offered $100 million general obligation bonds with slightly lower credit ratings (Aa3 and A+). Many of the maturities, not all, included bond insurance from Assured Guaranty Municipal. A 10-year insured bond in the deal yielded a tax-exempt 3.60% and a 15-year, 4.40%. A 21-year bond yielded 4.70%. The 30-year maturity in the deal featured an uninsured portion and an AGM-insured portion. The uninsured 30-year bond yielded 5.07% and the insured, 4.90%. Seasoned market participants still recall that this issuer was once known as the Richmond Unified School District, a name under which it once sought bankruptcy protection. The district has certainly made positive financial progress since its problems two decades ago, even if the history stays in the back of some investors’ minds.

Loyola Marymount University sold tax-exempt bonds through the California Educational Facilities Authority. The $22 million sale carried an A2 rating from Moody’s. A five-year bond yielded a tax-exempt 2.29%, a 10-year, 3.48%, and a 13-year, 4.00%.

The Brea Olinda Unified School District brought a small $4 million G.O. bond refunding to market (rated AA-minus by S&P). The five-year bond yielded 1.74% and the nine-year, 2.91%. The Ventura County Office of Education priced $12 million refunding certificates of participation with an AA-minus rating and Assured Guaranty Municipal insurance. Tax-exempt yields included 2.19% in five years; 3.48% in 10 years; 4.40% in 15 years, and 4.78% in 15 years.

The Rady Children’s Hospital bonds sold through the California Health Facilities Financing Authority also have been priced. The $100 million in revenue bonds are rated A+. We aren’t sure if these were the final tax-exempt yields, but the levels we have are 2.57% in five years, 3.92% in 10 years, 4.73% in 15 years, 5.17% in 20 years, and 5.38% in 30 years.

Europe Helps U.S. Bonds; State Public Works Took Center Stage

(Nov. 3, 2011) -- The big story in the fixed-income markets this week revolves around Europe and continuing questions about Greece’s debt crisis. This led to a powerful rally on Tuesday in U.S. Treasury securities; tax-exempt bonds also rallied in response. Yields dropped Tuesday, following Treasuries lower. On Wednesday the municipal market didn’t move much. If anything, yields rose a bit. Amid all this broader activity, several new deals in California priced. We usually run this summary on a Friday, but need to finish it a day earlier due to a scheduling issue this week.  We will add any necessary updates later.

The California State Public Works Board led the way this week with $497 million of lease-revenue bonds that are rated A2 and BBB+. A five-year bond yielded a tax-exempt 2.75%, a 10-year, 4.19%, a 15-year, 4.91%, and a 20-year, 5.20%. Those yields are similar to, though a bit lower, than what the Public Works Board paid on lease-revenue bonds in October.

The City of Marysville priced $112 million of revenue bonds on behalf of the Fremont-Rideout Health Group. These bonds carried A2 and A ratings. The health revenue bonds provided yields in the neighborhood of what the Public Works Board paid. A 10-year Fremont-Rideout Health tax-exempt bond (due in January 2022) yielded 4.25%, a 15-year (due in January 2027), 4.95%, a 20-year (due in January 2032), 5.25%, and a 30-year maturity (due in January 2042), 5.40%. We wanted to add all those maturities because we are using the January 1 maturity dates in the following year for our “benchmarks” (10 years, 15 years, etc.). The Public Works Board deal still could use 2021 for a 10-year maturity because it matures on December  1.

To provide some perspective from a higher-rated deal, the West Basin Municipal Water District priced $60 million of Aa2 and AA-minus refunding revenue bonds. The longer maturities came in with yields more than one full percentage point lower than the lower-rated deals discussed above. The earliest maturity for the West Basin deal, in 12 years, yielded 3.24%. The 15-year maturity with a 5% coupon was priced to yield 3.61% and the 20-year, 4.09%.

The Western Placer Unified School District sold $9 million single-A certificates of participation that also featured insurance from Assured Guaranty Municipal. The five-year COP yielded a tax-exempt 3.10% and a 15-year, 4.80%. The 20-year COP yielded 5.25% and the 30-year, 5.40%. There wasn’t a 10-year maturity in the deal; the seven-year yielded 3.55%.

San Francisco took competitive bids yesterday for $86 million of refunding certificates of participation tied to the Moscone Center.  A five-year COP yielded 1.96% and a 10-year, 3.09%. The longest maturity in the deal, 13 years, yielded 3.54%. These COPs were rated Aa3 and AA-minus.

Go South, Young Man, to Single-A for This Week's Juicier Yields

(Oct. 28, 2011) -- Municipal bond yields didn’t change all that much this week, generally rising a small amount. In contrast, U.S. Treasury bond yields rose roughly one-quarter of a percentage point. Investors could look at some single-A offerings for yield opportunities, primarily in health-related deals. Municipal bond funds have now seen “inflows” for seven out of the last eight weeks, including more than $300 million in the week ended October 26, according to Lipper FMI.

The Fairfield-Suisun Unified School District sold $32 million of general obligation refunding bonds with an Aa2 credit rating. A five-year bond yielded a tax-exempt 2.00% and a nine-year, 3.20%.  The 11-year bond yielded 3.52%. There were 10-year bonds, too, but we don’t seem to have the final yield. It was in the ballpark of 3.35%. The 15-year maturity yielded an even 4.00%.

California’s $439 million of economic recovery refunding bonds were packed into two maturities. The five-year yielded a tax-exempt 0.93% and a 10-year, 1.10%. These bonds were rated Aa3 and A+ and did far better than a lower-rated state general obligation bond sale a week earlier, as our Research page mentioned the other day.

The Children’s Hospital of Orange County brought a $107 million single-A revenue bond sale through the California Health Facilities Financing Authority. A five-year bond yielded a tax-exempt 2.62% and a 10-year, 3.98%. The 15-year bond yielded 4.63% and the 20-year, 5.20%. A 30-year maturity yielded 5.40%.

Catholic Healthcare West sold about $350 million of revenue bonds through CHFFA.  The bonds are rated A2, A and A+ (Fitch). The five-year maturity yielded 2.64% and the 10-year, 4.04%. A bond due in 2027 yielded 4.79% and a 30-year maturity, 5.35%.

The California Infrastructure and Economic Development Bank priced $120 million of revenue bonds on behalf of the J. David Gladstone Institutes, a nonprofit biomedical research firm. Standard & Poor’s rates them A-minus and Fitch, A. The earliest maturity, in six years, yielded a tax-exempt 2.94%. A 10-year bond yielded 4.04%.  The 15-year bond yielded 4.80% and the 20-year, 5.30%.

The San Lorenzo Valley Unified School District sold about $5 million of general obligation refunding bonds with an Aa2 rating. Tax-exempt yields included 1.91% in five years and 3.00% in nine years.

The Lincoln Public Financing Authority sold $42 million of assessment revenue bonds on behalf of Twelve Bridges Assessment District No. 95-1. S&P rates them A-minus, and the deal also included insurance from Assured Guaranty Municipal. A five-year bond yielded 2.92% and a 10-year, 4.05%. The 15-year bond yielded 4.63%.

The Poway Unified School District priced a small unrated Mello-Roos bond issue on behalf of CFD No. 10. A 10-year bond yielded a tax-exempt 5.00% and a 20-year bond, 6.05%.

Tax-exempt Rates Drop; State's Sale Took Spotlight From Others

(Oct. 21, 2011) -- Tax-exempt yields dropped this week, ending a recent string of rate increases. Some longer-term general obligation bonds probably dropped close to one-tenth of a percentage point. Not all municipal bonds shared in the decline equally; for example, certain revenue bonds didn’t change much if at all. U.S. Treasury yields didn’t change very much if you look at where they closed Thursday compared with a week earlier.

California’s big general obligation bond sale dominated the new-issue market this week. We discussed this sale and compared it with some of this week’s other new-issue yields on our Research page on October 20. As a result, we aren’t going to repeat that discussion here.

There were a handful of other sales this week. Yesterday, for example, the Amador County Unified School District took bids on $5 million of general obligation bonds with an Aa3 rating. The five-year bond yielded 1.93%, or 35 basis points less than what the State of California paid this week on the same maturity. Amador County school’s 10-year bond yielded 3.20%, or a half-point less than what the state paid on its G.O. debt for the same maturity. Finally, Amador County school’s 15-year bond yielded an even 4.00%. California paid 4.39% on a 15-year bond this week.

The Jurupa Unified School District sold $7 million of certificates of participation with a single-A rating. The five-year COP yielded 2.65% and the 10-year, 4.23%. The COPs were insured by Assured Guaranty Municipal. Certificates of participation aren’t viewed on the same footing, in terms of security, as G.O. bonds. That helps explain the higher yields. The Jurupa district also was selling G.O. refunding bonds with a little higher credit rating. We still have to double-check the final yields on that G.O. sale; we believe the five-year maturity was around 2.30% and the 10-year around 3.80%.

A Poway Unified School District financing authority sold $35 million of special tax (Mello-Roos) refunding bonds for certain 4S Ranch and Torrey Highlands districts. These bonds were not rated. A five-year bond yielded 3.25% and a 10-year, 4.45%. The 15-year bond yielded 5.10% and the 20-year, 5.50%.

Tax-exempt Rates Rise; Yields Sort of Sweet on BBB+ State Credit

(Oct. 14, 2011) -- Tax-exempt yields rose again this week, though not by a lot. In contrast, U.S. Treasury yields rose about two-tenths of a percentage point on both the 10-year and 30-year bonds. A handful of weeks ago we griped about high-quality five-year municipal bonds yielding 0.85% in the new-issue market. The last few days higher-quality municipal revenue bonds paid closer to 1.50% in five years. However, current tax-exempt rates remain relatively low.

This week’s example of a higher-quality revenue bond was provided by a $235 million sale from the Los Angeles County Metropolitan Transportation Authority. The first-tier Proposition A sales tax revenue bonds carried a triple-A rating from Standard & Poor’s and Aa2 from Moody’s Investors Service. The sale was packed into earlier maturities. A five-year bond yielded a tax-exempt 1.58% and a seven-year, 2.20%. A three-year maturity yielded 0.89%.

Local school districts have been regular participants in the new-issue market and this week wasn’t any different. The Corona-Norco Unified School District sold $22 million of general obligation bonds with Aa2 and AA-minus credit ratings. A five-year bond yielded a tax-exempt 1.91% and a 10-year, 3.15%. A 16-year maturity yielded 4.40%.

Assured Guaranty Municipal has insured quite a few recent local school bonds and it backed this week’s $42 million general obligation sale by the Lodi Unified School District. Without the insurance, the “underlying” ratings on the Lodi school bonds are A+ and AA-minus. The five-year bond yielded a tax-exempt 2.16% and a 10-year, 3.80%. A 15-year bond yielded 4.55%.

The California State Public Works Board sold almost $500 million of lease-revenue bonds this week. Two series were rated BBB+ and A2; Moody’s rated one series for California State University projects Aa3. As we expected, yields were relatively juicy. Even on a bond due in 15 years, tax-exempt yields were at 5% and reached 5.34% in 20 years (though rates were a little lower on the CSU series, including 4.87% in 15 years). As another example, lease-revenue bonds tied to a state prison project yielded a tax-exempt 2.72% in five years and 4.30% in 10 years.

Weekly Summary: Tax-exempt Rates Jump; Borrowers Still Happy

(Oct. 7, 2011) -- Tax-exempt yields jumped this week, making rates a little more palatable to investors. Yields had fallen to ridiculous levels two weeks ago after the Federal Reserve said it would try to push longer-term rates lower. Since then, however, tax-exempt yields have been rising. In the last two days alone some generic measurements of certain maturities showed a quarter-point increase. Make no mistake about it, this is still an issuer’s market. In fact, all the recent added refunding volume might be a factor in helping to push tax-exempt rates a bit higher. Borrowers are trying to refinance whatever they can. U.S. Treasury yields bounced around in recent days but didn’t change much from the level recorded a week ago.

The Ohlone Community College District priced $80 million of general obligation bonds and provided a good sense of yield levels for a decent double-A deal (Aa2 and AA). The 10-year bond yielded a tax-exempt 2.84%. By comparison, local school districts with lower ratings (such as A1 and A+) sold G.O. bonds this week with Assured Guaranty Municipal insurance. Their 10-year bonds paid in the range of 3.30% to 3.45% and even higher. We discussed those insured school deals here the other day and won’t include them again in this market summary. The Ohlone college district, at the southern part of San Francisco Bay, has a main campus in Fremont and a newly-built campus in Newark. The Ohlone 15-year bond yielded 3.73%, the 20-year, 4.23%, and the 30-year, 4.40%. A shorter maturity, due in seven years, yielded 2.12%.

Another smaller school district deal carried AGM insurance this week. Mountain View School District (School Facilities Improvement District No. 1) sold $5 million general obligation refunding bonds that, without the insurance, are rated A+ by Standard & Poor’s. The deal yielded a tax-exempt 2.17% in five years, 3.59% in 10 years, and 4.31% in 15 years.

The double-A deal for Trinity Health we mentioned earlier this week was priced, with all of the $106 million deal packed into a 30-year maturity. The tax-exempt yield was 5.00%. The bonds were issued through the California Statewide Communities Development Authority. A few other deals priced this week; we haven’t yet tracked down all the final yields for this summary.

Weekly Summary: Treasury Yields Rise, Muni Rates Up a Little

(Sept. 30, 2011) -- Tax-exempt yields followed Treasury rates higher this week, after a powerful rally a week earlier had pushed them lower. The 10-year and 30-year Treasury securities rose roughly a quarter-point this week. Municipal yields rose by less, closer to one-tenth of a full percentage point if that.

California’s new-issue municipal market was relatively busy this week, led by a string of refundings to take advantage of current low rates. An important note: Due to a separate deadline we are only listing a handful of these deals below and will add some more over the weekend. We also haven’t updated the yield table of recent sales below and will do so over the weekend.

The deals were led by a $408 million general obligation bond refunding from the Los Angeles Unified School District. Moody’s Investors Service rates the bonds Aa2 and Standard & Poor’s, AA-minus. A five-year maturity yielded a tax-exempt 1.47% and a 10-year, 2.87%. The longest maturity, a 13-year bond, yielded 3.40%.

In one of the larger competitively-bid sales this week, the Livermore-Amador Valley Water Management Agency offered $105 million of sewer revenue refunding bonds. Moody’s rated them Aa2 and S&P, A+. The five-year bond yielded 1.87% and the 10-year, 3.09%. The 15-year bond yielded 4.00% and the 20-year, 4.50%.

Berkeley Unified School District priced $56 million of general obligation refunding bonds, including a 1.55% yield in five years. Certain longer maturities included Assured Guaranty Municipal bond insurance, such as the 15-year bond that yielded 3.70%. Standard & Poor’s rated the bonds AA-minus.

The Rosemead School District sold $10 million of general obligation refunding bonds with an A+ rating from S&P. Assured Guaranty Municipal also insured the deal. A five-year bond yielded 1.97% and a 10-year, 3.39%. A 15-year bond yielded 4.16% and a 20-year, 4.72%. The Fresno Unified School District sold $106 million of G.O. debt, with a mix of current-interest and capital-appreciation bonds. A 10-year maturity yielded 3.09%.

The Camrosa Water District sold $10 million of water and wastewater revenue bonds. They were rated A1 and A+ (following a one-notch upgrade by S&P). The five-year bond yielded 1.82% and the 10-year, 3.22%. A 15-year bond yielded 4.25%.

Weekly Summary: Treasury Yields Plunge, Drag Muni Rates Lower

(Sept. 23, 2011) -- Just when you think yields couldn’t get any longer, along comes “Operation Twist.” That is what some call the Federal Reserve’s plan to buy longer-term U.S. Treasury securities to help keep interest rates lower. The yield on the 30-year Treasury bond plummeted by more than a half-point this week, falling to below 3%. The 10-year Treasury was down almost four-tenths of a percentage point to a bit less than 1.75%. The Federal Reserve’s plan, in response to concern over “significant downside” risks in the economic outlook, can’t get much credit for this week’s rate drop. The broader concern over a weak economy triggered stock selling and a run into so-called “safer” havens, including Treasuries. The Federal Reserve’s view on the economy had a far bigger impact on investors than a program to buy longer-term Treasuries.

Tax-exempt yields followed Treasuries lower, though the move wasn’t as dramatic. Longer-term rates fell by as much as two-tenths of a percentage point. Some generic measurements of yields continue to hover near lows last seen in the late 1960s. Shorter-term muni yields also declined, just not as much. The ratio of the 30-year tax-exempt to the 30-year U.S. Treasury moved above 120%. In more “normal” times the 30-year ratio would be closer to 90% and lower. On a relative basis something usually gives when this ratio goes to a strange level; either Treasury yields will rise relative to tax-exempt rates or municipal bonds will rally and drop more relative to Treasuries. Income-oriented investors would prefer to see Treasury yields rise relative to munis so tax-exempt rates don’t go even lower.

The actual impact of all this might be difficult to gauge in the new-issue market until some higher-rated deals come to market in the next week or two. California’s new-issue market saw some single-A credits such as the state this week; they also benefit from lower rates, just not as much as higher-rated issuers.

The State of California’s $2.4 billion general obligation bond sale was the big dog in the new-issue market (rated A1 and A-minus). We have already written about it and will simplify repeat sample yields: 1.61% in five years, 3.17% in 10 years, 4.14% in 15 years, 4.57% in 20 years, and 4.80% in 30 years. As we noted a few days ago, the state paid almost a full point more in 10 years than some higher-rated issuers recently paid on new deals.

In contrast, the Novato Unified School District sold G.O. bonds with double-A ratings this week. We didn’t follow up yet to get the final yields but we believe the 10-year maturity was somewhere in the neighborhood of 2.25%; again, that’s almost a full-percentage point less than what the state paid.

In competitive sales yesterday, the Riverside Unified School District brought $46 million of general obligation refunding bonds with Aa2 and A+ ratings. The deal also included a guarantee on most maturities from Assured Guaranty Municipal. The 10-year tax-exempt yield was 2.70%, almost a half-point less than what the State of California paid. The 15-year Riverside school yield was 3.65%, also about a half-point less than the state’s yield. We’re still waiting to track down the five-year yield because it wasn’t initially re-offered; the Riverside school deal paid 1.02% in four years and 1.70% in six years. However, we should add that the Riverside deal matures in February of each year so the “10-year” is more like nine-and-a-half years. The California deal included September maturities.

The Yosemite Unified School District yesterday competitively sold $8 million of G.O. refunding bonds with a single-A rating and AGM bond insurance.  The five-year maturity yielded 1.72% and the 10-year, 3.00%. A 14-year maturity yielded 3.80%. Assured Guaranty Municipal also backed $6 million of Buena Park School District G.O. bonds that sold this week (underlying rating of AA-minus). The Buena Park school deal yielded 1.47% in five years and 2.78% in 10 years. The 14-year maturity yielded 3.61%.

A sale of about $100 million also was pricing for Chapman University. The A2 bonds are being issued by the California Educational Facilities Authority. A 20-year tax-exempt yield was at 4.55%, about what the State of California had to pay. We aren’t sure if we have final yields yet in the Chapman University deal and will add them to the chart below when we do.

Weekly Summary: Five-Year Tax-exempt Yields of 0.95% ... for Some

(Sept. 16, 2011) -- A surge in new municipal bond sales didn’t push tax-exempt yields much higher this week. Tax-exempt rates were at best a tiny bit higher. Higher-quality issuers continue to benefit from low rates and an issuer’s market, as evidenced by five-year maturities yielding less than 1% tax-exempt. U.S. Treasury yields increased a bit more than muni rates this week, with the 10-year maturity up one-tenth of a percentage point. President Obama’s jobs bill proposal to curtail tax-exempt income for certain higher-income investors (capping the tax rate benefit at 28%) didn’t rattle bond trading; there is skepticism the plan will ever move forward.

The California State University sale of systemwide revenue bonds was among the deals in the spotlight this week, as the state and its related entities finally begin returning to the new-issue market. The sale was increased to $430 million because of the opportunities afforded by low rates. The bonds are rated Aa2 and A+. Standard & Poor’s changed its outlook to “positive” from “stable” because of the CSU system’s solid financial management. Investors could choose a 3% coupon or 5% coupon for the five-year maturity, which was priced to yield a tax-exempt 1.40%. The 10-year maturity with a 4% or 5% coupon was priced to yield 2.77%. The 15-year maturity yielded 3.64% and the 20-year, 4.23%. A 31-year maturity yielded 4.60%. (The 11-year maturity was the first to crack a 3% yield, with 3.00% even. The 19-year maturity was the first to pass 4% tax-exempt, yielding 4.04%.)

Among high-quality sales, the Metropolitan Water District of Southern California was in the market with $157 million of water revenue refunding bonds. They are rated Aa1 and AA+ by Moody’s Investors Service and Fitch Ratings, respectively. Standard & Poor’s grades them AAA. The five-year bond yielded 0.95%. The 10-year bond yielded 2.27%, a full half-point lower than the California State University sale mentioned above. The 15-year maturity yielded 3.24% and a 21-year bond, 3.87%.

The Orange County Sanitation District priced $148 million of wastewater revenue refunding bonds with an AAA rating from S&P and Fitch. The five-year bond yielded 0.95% tax-exempt. An 11-year maturity yielded 2.47%. A 15-year bond yielded 3.21%.

Another high-quality deal, $48 million of sales tax revenue refunding bonds from the Santa Clara Valley Transportation Authority, carried Aa2 and AA ratings from Moody’s and Fitch, respectively, and AAA from S&P. The five-year maturity yielded (you guessed it) 0.95% tax-exempt. The 10-year maturity yielded 2.25% and the 15-year, 3.26%.

So how does an investor get any added yield in today’s market? The opportunities, such as they are, involve accepting lower ratings and types of securities viewed as somewhat weaker in terms of creditworthiness (certificates of participation, for example). Santa Cruz County fit the bill in two ways this week, offering $6 million certificates of participation with an A2 rating. The five-year COP yielded a tax-exempt 2.00%, or more than twice the yield of some of the higher-quality bonds cited above. The 10-year maturity yielded 3.47% and the 15-year, 4.47%. A 20-year COP yielded 4.85%. A single-A COP sale by a Tulare – Porterville school financing authority also yielded 2.00% in five years. An eight-year maturity yielded 3.12%. Assured Guaranty Municipal insured the school COPs.

The Sacramento Municipal Utility District sold $326 million of electric revenue refunding bonds with A1 and A+ ratings. The five-year bond yielded 1.52% and the 10-year, 2.84%. A 15-year maturity yielded 3.77%. Although these bonds fell in the single-A category, electricity is seen as an “essential purpose” and that helps draw some risk-averse investors who otherwise stick to higher-rated bonds.

Huntington Beach’s $36 million sale of lease-revenue bonds yielded 1.62% in five years and 2.95% in 10 years. A 15-year bond yielded 4.09%. The bonds are rated Aa3 and AA.

The Ojai Unified School District sold $5 million of general obligation bonds with an A+ rating and insurance from Assured Guaranty Municipal. A five-year bond yielded 1.67% and a 10-year, 2.95%.

Five-Year Tax-exempt Yield of 0.85%? Read Weekly Summary, Weep

(Sept. 9, 2011) -- Much has been made recently about the yield on the U.S. Treasury 10-year security, specifically focusing on the fact it has hovered around 2.00% and even closed a shade lower (1.99% the other day). The new-issue market in California this week had its own parallel horror story as one high-rated sale offered a five-year maturity at less than 1% tax-exempt (0.85% to be specific). At least the Taxable Equivalent Yield for many buyers is still above 1% but that doesn’t provide much solace. The detail of that pricing is below. In the broader tax-exempt market rates dropped this week, maybe close to one-tenth of a percentage point on some maturities. U.S. Treasury yields dropped even more; for example, the 30-year Treasury dropped by two-tenths of a percentage point. The new-issue market wasn’t tested by any big deals in California.

The Tiburon-based Reed Union School District took bids yesterday on a $27 million general obligation refunding bond sale. Standard & Poor’s rated the bonds AAA. A five-year maturity with a 4.00% coupon was priced to yield a tax-exempt 0.85%. A 10-year bond with a 4.00% coupon was priced to yield 2.07%. The 15-year maturity didn’t even offer 3% tax-exempt; it came in at 2.92%. The longest maturity in the sale, 17 years, yielded 3.15%.

The San Diego County Water Authority popped into the market with $95 million of water revenue refunding bonds. We thought this deal might price before Labor Day but sometimes market conditions, such as a temporary rise in rates, affect the timing of refunding deals. The bonds are rated Aa2 and AA+. A 10-year bond with a 5.00% coupon was priced to yield 2.45%. A 17-year maturity yielded 3.64%. The 20-year bond yielded 3.92%.

The Chaffey Joint Union High School District priced $44 million of general obligation refunding bonds. They are rated Aa2 and AA-minus. A five-year maturity with a 4.00% coupon was priced to yield a tax-exempt 1.10%. A 10-year bond with a 5.00% coupon was priced to yield 2.45%. The 15-year maturity with a 5.00% coupon was priced to yield 3.62%.

The Shoreline Unified School District sold $5 million of general obligation refunding bonds with a double-A rating from Standard & Poor’s. The five-year bond was priced to yield 1.32% and the 10-year, 2.65%. The 15-year maturity yielded 3.64%. The Shoreline district is based in Tomales in Marin County.

A small $2 million G.O. refunding bond from the Sebastopol Union School District offered a little more yield thanks to an A1 rating. However, the bonds also were guaranteed by Assured Guaranty Municipal, helping keep yields a bit lower. The five-year bond yielded 1.67% and the 10-year, 2.95%.

The City of Palo Alto sold $17 million of high-quality utility revenue refunding bonds (Aa2 and AAA ratings). We haven’t yet tracked down the yields on certain maturities that weren’t reoffered. A four-year bond yielded a tax-exempt 0.62% and a nine-year, 2.00%. The 15-year maturity yielded 3.02%.

Tax-exempt Yields Rose As Pre-Labor Day Activity Slowed Down

(Sept. 2, 2011) -- Tax-exempt yields generally rose by a few basis points this week during a lackluster few days prior to the holiday-shortened Labor Day week. In contrast, U.S. Treasury rates declined. On a relative basis, municipal bonds are an attractive buy versus Treasuries using historic ratios as a guide. However, tax-exempt yields also are still way down after a powerful rally, and some smaller buyers no doubt find them unattractive.

The West Basin Municipal Water District sold $34 million of refunding revenue bonds with Aa2 and AA-minus ratings. The West Basin district’s service area includes 17 cities in Los Angeles County. A six-year maturity yielded a tax-exempt 1.50% and a 10-year, 2.76%. The longest 13-year bond yielded 3.52%.

The Modesto Irrigation District priced $33 million of electric revenue refunding bonds. These bonds were rated A2 and A+. A 15-year maturity yielded 4.27% and a 20-year, 4.75%.

A $4 million general obligation refunding deal from the Mesa Union School District in Somis yielded 1.39% in five years and 2.86% in 10 years. A 16-year bond yielded 4.04%. The bonds were rated AA and AA- by S&P and Fitch, respectively.

The Palmdale Elementary School District priced $15 million of general obligation refunding bonds with an Aa3 rating. The five-year maturity yielded 1.69% and the 10-year, 3.12%.

It was again a relatively quiet week for new bond issuance and our summary of market activity is intentionally short. Look for longer updates to resume beginning in mid-September, when we expect new sales to pick up.

Tax-exempt Yields Rose Following Sharp Drop; Dog Days Are Here

(Aug. 26, 2011) -- Tax-exempt yields generally rose across the board this week. Some measurements of longer-term maturities indicated a quarter-point increase, though the actual changes in secondary trading varied depending on the type of bond, credit quality, and maturity. The rate rise wasn’t a surprise after a powerful rally drove yields down to levels that sent some investors to the sidelines, if they weren’t already there in recent weeks. U.S. Treasury rates also rose in recent days.

The dog days of late August might keep the municipal market a bit stagnant next week, ahead of the holiday-shortened week for Labor Day. Then the next question will be just how much new sales volume will pick up in the late summer and fall. The return of the State of California to the new-issue market ensures a bit of a sales pop in our region.

The San Francisco Airport Commission led this week’s sales with more than $350 million of tax-exempt and taxable revenue refunding bonds (part of the tax-exempt sale also was subject to the federal alternative minimum tax). The bonds are rated A1 and A+. An 11-year maturity for the non-AMT portion was priced to yield 3.39% and a 15-year yielded 4.15%. A 19-year non-AMT bond yielded 4.49%.

In contrast, the airport commission’s tax-exempt bonds subject to the AMT yielded 4.09% in 11 years, 4.80% in 15 years, and 5.09% in 19 years.

We might not add anything more to this summary later on Friday because it was a relatively quiet week for new bond issuance.

Tax-exempt Rates to LBJ Level; New Sales Jumped During Week

(Aug. 19, 2011) -- Tax-exempt yields kept falling again this week, knocking another one-tenth of one percentage point off rates from a week earlier. One measurement of change, the Bond Buyer 11-Bond General Obligation Index of 20-year maturities, fell to its lowest level since when President Lyndon Baines Johnson was in office. It hasn’t been this low since the spring of 1967. Some generic measurements of the highest-grade 10-year tax-exempt yields are at all-time lows, period.

It is an issuer’s market and several of them jumped into California’s municipal bond market this week. The California Department of Water Resources led the way with $960 million of power supply revenue bonds. Moody’s Investors Service rates the bonds Aa3 and Standard & Poor’s, AA-minus. Fitch Ratings grades them AA. A seven-year bond yielded a tax-exempt 1.92% and a 10-year, 2.66%. The department entered the business of power procurement and related power bond sales in the aftermath of California’s energy crisis a decade ago. The bonds are backed by charges on customers of investor-owned utilities; the creditworthiness has improved because the state’s exposure to power market volatility has decreased.

The Southern California Public Power Authority priced $157 million of revenue bonds for the Milford Wind Corridor Phase II Project in Utah. S&P and Fitch rate the bonds AA-minus. A five-year bond yielded 1.22% and a 10-year, 2.74%. The 15-year maturity yielded 3.72% and the 20-year, 4.14%.

The Water Replenishment District of Southern California issued $69 million of revenue certificates of participation. This deal is noteworthy for AA+ ratings from Standard & Poor’s and Fitch. The five-year bond yielded 1.40% and the 10-year, 2.96%. The 15-year bond priced at 4.22%, the 20-year maturity yielded 4.65%, and the 30-year, 5.00%.

The University of California Regents sold $355 million of tax-exempt general revenue bonds with Aa1 and AA ratings (Fitch graded them AA+). We don’t think a repricing changed yields much but we didn’t check the final numbers. The 10-year maturity was probably going to yield in the neighborhood of 2.60% and the 20-year, not much off 4.00%.

The Cucamonga Valley Water District priced $109 million of water revenue refunding bonds carrying Aa3 and AA-minus ratings. Assured Guaranty Municipal guaranteed the bonds. A five-year bond yielded 1.20% and a 10-year, 2.66%. A 15-year yielded 3.83% and a 20-year, 4.25%.

Assured Guaranty Municipal also backed a Mojave Unified School District S.F.I.D. No. 1 $10 million general obligation bond with an underlying A+ grade. AGM also guaranteed an Aromas-San Juan Unified School District $8 million G.O. bond sale (with an underlying single-A grade). The yields on those sales were in the ballpark of 1.90% in five years and 3.30% in 10 years. In contrast, a Roseville Joint Union High School District G.O. bond sale with an AA-minus rating yielded roughly half-a-percentage point less.

The San Jose Unified School District also priced its general obligation refunding bonds that had been on our calendar. We didn’t follow-up yet on final yields. However, the double-A deal looked to be yielding roughly 1.10% in five years and 2.50% in 10 years.

Tax-exempt Rates Drop Even Lower; Slow Week for New Sales

(Aug. 12, 2011) -- Standard & Poor’s downgrade of the United States didn’t derail a continuing rally in fixed-income securities. Tax-exempt yields dropped again, down by almost a quarter-point by some measurements through mid-Thursday. U.S. Treasury securities were all over the place in recent days due to various factors, with yields lower than a week earlier. The Federal Reserve’s pledge to keep rates low for two more years helped support bonds, and U.S. Treasury prices were up strongly until selling on Thursday knocked them back. Some higher-grade general obligation measurements are down about one-half of a percentage point in the last two weeks. It’s hard to believe that tax-exempt yields would go much lower; if anything, a tick upwards is possible after this rally. Low supply of new municipal bond sales continues to be a factor supporting the rally.

The Los Angeles Department of Water and Power brought $307 million of water system revenue bonds at an opportune time, given the recent rally. The debt is refinancing older bonds. Moody’s Investors Service rates the bonds Aa2; Standard & Poor’s, AA, and Fitch Ratings, AA+. The shortest maturity, a six-year bond, yielded a tax-exempt 1.44%. The longest 30-year maturity came in at 4.30%. The 19-year bond was the first chance to get a 4% yield, and it was priced at par. A 10-year maturity yielded 2.56% and a 15-year, 3.60%.

The West Contra Costa Unified School District priced $86 million of general obligation refunding bonds. Moody’s Investors Service rates the district Aa3 and Standard & Poor’s, after a recent one-notch upgrade, A+. The bonds also carried a financial guarantee from Assured Guaranty Municipal. A five-year maturity yielded 1.97% and a 10-year, 3.45%. The longest maturity, in 13 years, yielded 4.11%.

Stunning Rally In U.S. Treasuries Pushes Tax-exempt Rates Lower

(Aug. 5, 2011) -- There was one overriding story in the fixed-income markets this week, and it had to do with a powerful rally in U.S. Treasury securities that dragged tax-exempt yields lower as well. The 10-year Treasury maturity dropped about one-half of a percentage point over the last week and the 30-year, about three-fifths of a percentage point. Municipal bonds followed in the footsteps. Because of the tax-exemption on these bonds, muni yields don’t move in exact lockstep with Treasuries. Still, they also staged a powerful rally. Various maturities dropped more than a quarter-point in the last week and a high-grade 30-year tax-exempt probably declined more than that, even as much as four-tenths of a percentage point using generic measurements.

While the federal agreement on raising the debt ceiling helped set the stage for the rally, a so-called flight to safety because of various market conditions pushed it into overdrive. Thursday’s stock decline, along with continuing concern over a European debt crunch, helped push Treasury yields even lower (meaning bond prices rose because fixed-income prices and yields move in opposite directions).

The impact of the rally didn’t necessarily show up in this week’s new-issue sales, either because they priced a bit before the biggest yield drop or because the types of securities didn’t benefit as much from the improvement. For example, this week’s sales mix included a double-B tax-exempt nonprofit health bond, lease-revenue bonds, and a Mello-Roos deal. These types of securities won’t rally as much as top-rated general obligation bonds.

A $77 million revenue bond refunding for the Sacramento Regional County Sanitation District priced this week. A financing authority issued the bonds, which carry Aa3, AA, and AA-minus (Fitch) ratings. There was a relatively narrow range of maturities; a bond due in 2022 yielded 3.20% and a 15-year, a tax-exempt 3.77%.

The Port of Oakland jumped into the market yesterday with a revenue bond refunding sale of almost $350 million. The bonds are rated A2 and A, plus an A+ from Fitch Ratings. We didn’t get all the final yields, though preliminarily the 10-year maturity looked to be in the neighborhood of 4.10% and the 20-year, 5.20%.

At the other end of the credit spectrum, the City of San Buenaventura (commonly known as Ventura) sold $350 million of revenue bonds on behalf of Community Memorial Health System. Moody’s Investors Service rates the bonds Ba2 and Standard & Poor’s, BB. Bond denominations were $100,000 instead of the typical $5,000 for higher-rated deals. You don’t see such big non-investment-grade new issues very often and you also don’t see such hefty tax-exempt yields very often. A five-year bond yielded a tax-exempt 5.11% and a 10-year, 6.62%. The 15-year maturity yielded 7.20%, the 20-year, 7.40%, and the 30-year, 7.65%. Do the taxable equivalent yield calculations on those and you’ll see investors are being compensated for taking on the added risk.

The Belmont-Redwood Shores School District sold various tax-exempt general obligation bonds with Aa2 and AA credit ratings. The $31 million tax-exempt Belmont Elementary Schools Facility Improvement District G.O. bonds yielded 2.90% in 10 years and 4.95% in 30 years. Big parts of the maturity schedule came as capital appreciation bonds.

The Coast Community College District priced more than $20 million of lease-revenue bonds (rated Aa3 and A+) through a financing authority this week. A five-year bond yielded a tax-exempt 2.51% and a 10-year, 4.15%. The 15-year maturity yielded 5.05%, the 20-year, 5.25%, and the 30-year, 5.62%.

The Davis Joint Unified School District priced $9 million of AA-minus G.O. bonds. A 15-year maturity yielded 3.40%.

In an unrated Mello-Roos bond sale example, the Jurupa Community Services District issued $7 million of CFD No. 38 (Eastvale Area) special tax bonds. Tax-exempt yields ranged from 3.00% in five years to 6.00% in 31 years. The 10-year bond yielded 4.60% and the 15-year, 5.30%, with the 20-year at 5.75%.

Irrigation Districts Led New-Issue Market; U.S. Debt the "Big" News

(July 29, 2011) -- The debate over raising the federal debt ceiling, and a looming August 2 deadline to do so, dominated fixed-income chatter this week. Tax-exempt bond yields didn’t change much and the August doldrums seemed to set in prematurely. We provided very few updates on other pages this week because of the “slow” activity. The rating agencies have warned that a downgrade of the United States triple-A credit rating could have implications for certain municipal issuers because of potential federal spending declines and other factors.

In the new-issue market, two irrigation districts took the spotlight. The Turlock Irrigation District sold $207 million of first priority subordinated lien revenue refunding bonds. Standard & Poor’s assigned a single-A rating to the issue and Moody’s, A2. Fitch Ratings grades the Turlock deal A+. A five-year bond yielded 1.74% and a 10-year, 3.42%. The 15-year maturity yielded 4.35% and the 20-year, 4.81%. A 30-year maturity yielded 5.12%.

The Imperial Irrigation District, which has been in the market a handful of times this year, returned with $76 million of electric system refunding revenue bonds. Moody’s rates the bonds A1 and S&P, AA-minus. A five-year bond yielded 1.76% and a 10-year, 3.38%. The 15-year maturity yielded 4.25% and the 20-year, 4.71%. A 30-year maturity yielded 5.15%.

San Diego County priced $33 million certificates of participation with Aa3 and AA+ credit ratings. The five-year maturity yielded a tax-exempt 1.87% and the seven-year, 2.73%. A 10-year COP yielded 3.58% and a 15-year, 4.39%. Going out 20 years returned 4.95% and a 31-year maturity yielded 5.33%. Going out 12 years almost got an investor 4% (actually 3.98%).

Capital appreciation bonds, sold at a deep discount to par, continue to be popular in some sales. The Mendocino-Lake Community College District priced $37.5 million of general obligation bonds and the majority of the deal included capital appreciation bonds. Sample reported yields included 4.93% in 10 years and 6.19% in 15 years. The bonds were insured by Assured Guaranty Municipal and also carry an “underlying“ A+ rating. A 30-year current interest bond in the college deal yielded 5.22%.

The Needles Unified School District sold $4 million of general obligation refunding bonds, with most of this deal also structured as capital appreciation bonds. The 10-year CAB yielded 5.08% and the 15-year, 6.39%. Shorter maturities were current-interest bonds and a four-year yielded 1.77%. Assured Guaranty Municipal insured the Needles school debt, which carried an underlying single-A rating based on the school district’s creditworthiness.

The Stanislaus Union School District sold G.O. bonds and most were structured as capital appreciation bonds. Assured Guaranty Municipal insured the deal. A current-interest bond due in 30 years yielded 5.22%. The Poway Unified School District School Facilities Improvement District No. 2007-1 also was pricing a general obligation bond deal with Aa2 and AA-minus ratings; we believe these also were capital appreciation bonds.

A Folsom financing authority sold Mello-Roos bonds for CFD No. 7. They are rated A-minus by S&P and also insured by Assured Guaranty Municipal. Sample yields included 3.05% in five years and 4.60% in 10 years.

The City of San Buenaventura (commonly known as Ventura) is selling $346 million of revenue bonds on behalf of Community Memorial Health System. As far as we know that deal wasn’t priced this week and now might sell next week. Moody’s Investors Service rates the bonds Ba2 and Standard & Poor’s, BB. Bond denominations will be $100,000 instead of the typical $5,000 for higher-rated deals.

Big Competitive Sales From State's Major Cities Topped Market

(July 22, 2011) -- Tax-exempt bond yields remained steady this week. If anything they dropped by a few basis points. The municipal market might be affected in coming days by the debate over the federal debt ceiling, though if a deal is reached this concern will fade away. New bond issuance in California was dominated for a change by competitively-bid sales and they will be our main focus in this summary.

As we noted earlier this week, the City of Los Angeles doesn’t have to shed any tears over a recent downgrade. Moody’s Investors Service recently lowered the city’s general obligation bonds to Aa3, putting them on the same level as other rating agencies at their AA-minus level. However, the city benefited from selling new bonds in an issuer’s market. On Tuesday Los Angeles sold $117 million of G.O. bonds. An investor would have had to go all the way out to a 2029 maturity to get a tax-exempt 4.04% on Tuesday’s sale. The 10-year maturity yielded 2.95%. The five-year yielded 1.34%, and the seven-year, 2.06%. The longest maturity in the deal, 20 years, yielded 4.23%.

On Thursday Los Angeles sold $260 million of G.O. refunding bonds. The five-year bond yielded 1.35% and the seven-year, 2.17%. A nine-year bond yielded 2.79%. A 12-year maturity yielded 3.31%.

The San Francisco Public Utilities Commission sold more than $700 million of water revenue bonds in a handful of series on Thursday. Moody’s Investors Service recently downgraded the commission’s water bonds by one notch, lowering them to Aa3 from Aa2. The downgrade affected the new sale and the commission’s existing water revenue bonds (totaling $3.7 billion if the new debt is included). As with Los Angeles, however, the San Francisco utility could thank an issuer’s market for relatively low yields. A five-year bond was pegged at 1.30%. A 10-year maturity in one of the series yielded 2.93%. A 15-year bond provided a 3.77% return. Yields rose above 4% on the 17-year maturities. A 20-year bond yielded 4.28% and a 30-year, 4.70%.

The Mountain View Shoreline Regional Park Community in Santa Clara Community priced $35 million of revenue bonds. They are rated single-A by Standard & Poor’s. The community was created in 1969 to develop 1,547 acres of bayfront land in the northeastern part of Mountain View. Revenue supporting the bonds comes from an allocation of tax revenue paid into a special fund of the community. The five-year bond yielded 3.03% and the 10-year, 4.60%. The 15-year bond yielded 5.32% and the 20-year, 5.60%.

There were a handful of other sales that we haven’t checked on for final yields. The Moreland School District priced $8 million of Aa3-rated G.O. refunding bonds. The maturities all fell within nine years. The five-year bond yielded somewhere in the neighborhood of 1.6%.

Tax-exempt Yields Drop as San Jose Airport Led New Issuance

(July 15, 2011) -- Tax-exempt bond yields dropped by a decent margin this week, driven by certain market conditions and declining U.S. Treasury rates. By some generic measurements municipal bond yields dropped one-tenth of a percentage point, though as usual that impact varied by maturity, credit rating, and type of security. Reinvestment of July payments from existing municipal bonds is getting some credit for decent investor demand in recent days. Despite rating warnings over the debt ceiling debate and the possibility of a downgrade on the triple-A United States grade, yields on U.S. Treasury bonds dropped sharply week.

This week’s biggest sale among fixed-rate bonds came from the City of San Jose, with $236 million of revenue debt for its airport. The A2 and A ratings meant investors would see juicier yields than some of the recent double-A offerings by general obligation issuers. A five-year maturity yielded 2.26%, a 10-year bond, 3.90% and a 15-year, 4.63%. A 20-year maturity yielded 5.05%. The majority of the sale is subject to the federal alternative minimum tax and, as a result, carried higher yields. The five-year AMT portion yielded 3.01% in five years and 4.60% in 10 years. A 15-year AMT maturity paid 5.33%.

In contrast, the double-A offering of $22 million general obligation bonds from the Glendale Unified School District featured the stingy yields typical for such deals in recent weeks. A five-year maturity yielded 1.39%. A 10-year bond yielded 2.96% and a 15-year, 3.93%.

A couple school districts brought new G.O. bonds with ratings in the single-A rating category. Both deals included bond insurance from Assured Guaranty Municipal. The single-A Fort Bragg Unified School District $9 million G.O. sale yielded 3.60% on a 10-year bond and 4.58% on a 15-year. Going out 30 years got you a 5.30% tax-exempt yield. The Garvey School District $5 million G.O. sale was rated A1 and A+ with AGM insurance to boot. A five-year bond yielded 1.95% and a 10-year, 3.56%.

The San Diego County Water Authority sold $87 million of subordinate lien bonds rated Aa3 and AA. All the sale was packed into a five-year maturity with a 1.48% yield. The Windsor Unified School District G.O. sale we mentioned in our weekly preview featured capital appreciation bonds.

Holiday-Shortened Week Saw a Few New Deals Price; Yields Up

(July 8, 2011) -- Tax-exempt bond yields rose again this week by a few basis points, at least on longer maturities. Some traders say the market is fighting a bout of indigestion as dealers find it harder to move inventory after yields plunged in recent weeks. It wouldn’t surprise us that some smaller retail investors are avoiding some of the more-aggressively priced municipal bonds. Holiday-shortened weeks aren’t always the best ones for monitoring market trends. Yields on U.S. Treasury bonds didn’t change much this week.

The Eastern Municipal Water District sold about $56 million of water and sewer refunding revenue bonds. This debt carries double-A ratings (and an AA+ from Fitch). The water district serves an area running from Moreno Valley south to Temecula and eastward to Hemet and San Jacinto. A five-year maturity yielded a tax-exempt 1.48% and the longest maturity in the sale (nine years) yielded 2.84%. A seven-year bond yielded 2.27%.

The San Mateo High School District priced $35 million of general obligation bonds with Aa1 and AA ratings. A four-year maturity yielded 1.14%. A 10-year bond yielded 3.06% and a 15-year, 3.97%. A 20-year maturity yielded 4.39%. The deal also included capital appreciation bonds.

A smaller G.O. sale by the Oxnard School District was rated Aa3 and A+. It included backing from Assured Guaranty Municipal. The five-year maturity yielded 1.90% and a 10-year, 3.45%. A 15-year bond yielded 4.66%.

The San Rafael City High School District priced G.O. bonds that are rated Aa2 and AA. A sample 10-year maturity from that sale yielded just a bit above 3%. As with a lot of deals nowadays, the “premium” bond structure is used to provide a bit of protection against rising rates. So the coupon on the 10-year maturity was 5% and the price was a bit above 116. The five-year maturity in the sale yielded in the neighborhood of 1.5%. The 15-year maturity was closer to 4.00%. The San Rafael City Elementary School District priced G.O. bonds rated a notch lower (Aa3 and AA-). A 10-year maturity in that sale yielded closer to 3.30%.

We also added the final yields from the institutional pricing for the San Diego Community College District sale of $372 million general obligation bonds. The deal appealed to a broad range of buyers thanks to a Moody’s Investors Service grade of Aa1 and a Standard & Poor’s rating of AA+, both of them one notch below triple-A. The bonds were split into various series. A five-year maturity yielded 1.46%. A 10-year bond yielded 3.11% and a 15-year, 4.06%. A 20-year maturity yielded 4.47% and a 30-year, 4.86%.

Tax-exempt Rates Rise; You Wouldn't Know It on Some New Deals

(July 1, 2011) -- You might not know it from some of the new-issue pricings, but tax-exempt bond yields did rise this week. In fact, using some generic measurements, yields on certain maturities probably rose by one-tenth of a full percentage point. Yields on U.S. Treasury bonds jumped even more, rising by as much as one-quarter of a percentage point. The safe haven allure of U.S. Treasuries amid concern over the Greek debt crisis also cut both ways; as some short-term concern over the situation in Greece dissipated, some investors moved back out of U.S. Treasuries.

As we have observed in recent weeks, it continues to be an issuer’s market for higher-rated deals. A handful of examples from this week’s new sales show why. A $131 million Los Angeles County Sanitation Districts Financing Authority revenue bond sale carried a Moody’s Investors Service grade of Aa1 and AA+ from Standard & Poor’s. A five-year maturity yielded a tax-exempt 1.37% and a 10-year, 2.91%. The high ratings, only one notch below triple-A, are driven by a requirement that participating districts make installment payments from a property tax allocation. That is why these are also called “senior ad valorem obligation bonds.” The sanitation district system provides sewage treatment and disposal to more than 5 million people in Los Angeles County.

The City of Saratoga sold $12 million of general obligation bonds with triple-A ratings. The five-year bond yielded a tax-exempt 1.37% and the 10-year, 2.80%. The 15-year bond yielded 3.60% and the 20-year, 4.00%. (So much for the days when investors with a “laddered” strategy could roll over money into a 10-year muni yielding 4.00%, at least given the current market for higher-grade securities.)

Ventura County’s community college district priced $50 million of G.O. bonds with double-A ratings. The yields weren’t much better: 1.45% in five years, 3.03% in 10 years, and 3.93% in 15 years.

There were some alternatives with higher yields. Santa Rosa high school and elementary school districts priced smaller G.O. issues with A+ ratings. Assured Guaranty Municipal provided financial guarantees. The five-year maturities yielded either 1.70% or 1.90% and the 10-year bonds came in closer to 3.40%. The 15-year bonds were around 4.30%. San Francisco Airport Commission revenue bonds with A1 and A+ ratings also provided some higher yields. Going out 20 years provided a tax-exempt return of 4.81%, while a shorter 11-year maturity yielded 3.79%. The commission’s sale also included tax-exempt bonds subject to the federal alternative minimum tax, and those yielded closer to roughly 5% in 14 years. S&P the other day upgraded its rating on the airport by one notch. “The raised rating reflects our opinion of management’s demonstrated efforts to control increases to the cost structure, attract new service, and manage future growth at the airport,” S&P said.

Puerto Rico sold general obligation bonds that are tax-exempt for California residents (both on a federal and state level). These bonds are rated in either the triple-B range or A3 from Moody’s, which has the commonwealth on a list for possible downgrade. The five-year maturity yielded 3.12% and an eight-year, 4.26%. A 20-year bond yielded 5.68% and a 30-year, 5.95%.

The Pittsburg Unified School District sold (through a finance authority) G.O. bonds with Aa3 and A ratings. Most of them were structured as capital appreciation bonds with sample yields of 5.42% in 10 years and 7.30% in 20 years. A current-interest bond due in 2046 (a 35-year maturity) yielded close to 5.60%.

Last week we said we would fill in yields on the San Bernardino Valley Municipal Water District certificates of participation sale with a top AAA rating from Standard & Poor’s. The bonds weren’t reoffered, and we forgot to get rate estimates. Earlier this week we plugged in those yields, which included 1.40% in five years, 3.00% in 10 years, and 4.20% in 20 years.

We Said to Buy Last Winter Amid "Panic"; Now You Can See Why

(June 24, 2011) -- As we observed elsewhere this week, it continues to be an issuer’s market for higher-rated deals. The example we cited was this week’s $47 million bond pricing by the Contra Costa Water District. A five-year water revenue bond (rated Aa2 and AA+) yielded 1.40% and a 10-year, 2.90%. The 14-year maturity yielded 3.62%. We concluded that sensitive investors (and insensitive investors and hardened bond traders as well) are shedding some tears over these paltry yields. Well, we told you the time to be buying was last winter, amid another false panic over municipal bonds. In the broader market this week, tax-exempt yields generally were steady if not a bit lower.

The San Marcos Unified School District’s $145 million offering of general obligation bonds carried Aa2 and AA- ratings from Moody’s Investors Service and Standard & Poor’s, respectively. A good chunk of the deal was structured as capital appreciation bonds. Tax-exempt yields on the current-interest bonds included 3.08% in 10 years and 4.78% in 20 years. A bond due in 2038 yielded 5.10%.

The Chino Valley Unified School District sold $34 million of G.O. bonds with a split rating (Aa2 and A+). The five-year bond yielded 1.55%, the 10-year, 3.18%, and the 15-year, 4.14%. San Ramon certificates of participation with an AA+ rating yielded 1.77% in five years and 3.33% in 10 years.

The Los Angeles Harbor Department also was in the market this week with higher-rated revenue bonds (Aa2 and AA). The Los Angeles Port is the busiest in the nation based on certain measurements, including container traffic and revenue per ton. In this day and age of worldwide trade, the port provides an essential service to the economy. However, the deal had to include higher yields on a portion of the tax-exempt bonds because they are subject to the federal alternative minimum tax. A five-year maturity subject to the AMT yielded 2.20% and a 10-year, 3.78%. In contrast, a part of the deal that wasn’t subject to the AMT only had to yield 3.30% on a bond due in 2022. A bond subject to the AMT and due in 2022 had to pay 3.96%. A 14-year Harbor Department bond that wasn’t subject to the AMT yielded 3.77%.

Grass Valley’s smaller double-A sale of wastewater revenue bonds yielded a tax-exempt 1.62% in five years and 3.08% in 10 years. Remember the California Infrastructure Bank deal we discussed for The Broad museum collection in Los Angeles? That $150 million sale was packed into a 10-year maturity and yielded a tax-exempt 3.13%.

Investors could pick up a little yield on a small Denair Unified School District general obligation bond sale. The A+ bonds were insured by Assured Guaranty Municipal and yielded 2.50% in five years, 3.98% in 10 years, and 4.69% in 15 years. Denair is located southeast of Modesto.

The San Bernardino Valley Municipal Water District sold about $9 million certificates of participation with a top AAA rating from Standard & Poor’s. We haven’t filled in the yields on this deal yet in the table below because the bonds weren’t reoffered, and we forgot to get rate estimates. We’ll do so soon and plug in some numbers.

Los Angeles Power and Pomona School Bonds Show Yield Trends

(June 17, 2011) -- A $694 million power system bond sale by the Los Angeles Department of Water and Power was the deal in the spotlight this week, especially in a year when $100 million-plus offerings are rare. Tax-exempt rates didn’t change much this week and certain indices remain at the lowest level since early November 2010. U.S. Treasury yields did drop this week and also are at the lowest levels since November.

Moody’s Investors Service rates the Los Angeles power system bonds Aa3; Standard & Poor’s and Fitch Ratings, AA-minus. Investors were offered coupons of either 2% or 5% on a three-year maturity and they were priced to yield a tax-exempt 0.90%. The five-year bonds with 2% or 4% coupons were priced to yield 1.49%. A seven-year maturity with 3% or 5% coupons was priced to yield 2.36%. The 10-year bond with either 4.50% or 5% coupons yielded 3.09%. The longest maturity in the sale, 11 years, yielded 3.26%. Proceeds from the new sale refunded certain outstanding 2001A power system revenue bonds and certain 2003B power system revenue bonds. Los Angeles DWP is the largest municipal utility in the United States.

We have been making the point for some time that investors have to venture into single-A territory to find added income-generating opportunities. The Los Angeles utility example above is a good measurement of how much tax-exempt rates have fallen for higher-rated sales, especially those for an “essential purpose.” In contrast, the Pomona Unified School District this week sold $46 million of general obligation bonds with a single-A rating. The five-year maturity yielded 2.50% and the 10-year, 4.00%. Those yields are roughly a full percentage point higher than what the L.A. DWP deal paid. Pomona school’s 15-year bond yielded 4.90% and the 20-year, 5.25%.

The Greenfield Union School District sold a tiny issue of certificates of participation this week with an “underlying” rating of A-minus. The deal carried a guarantee from Assured Guaranty Municipal. The five-year bond yielded 3.25% and the 10-year, 4.62%. The 20-year maturity yielded 5.70% and the 30-year, 5.97%.

A City of Livermore certificate of participation sale came under the heading of not reoffered. A 10-year COP yielded 3.60% and an 18-year maturity, an even 5.00%. There were a handful of other bonds priced this week, including some structured as capital appreciation securities. A 20-year maturity on a Brea Redevelopment Agency new tax allocation bond yielded a tax-exempt 5.33%.

Tax-exempt Bond Sales Surge For a Change, Based on 2011 Levels

(June 10, 2011) -- Sales of new municipal bonds in California surged this week, at least in comparison with some of the slower weeks in 2011. Issuers are taking advantage of a springtime rally that pushed tax-exempt rates to the lowest levels since last November (at least on higher-quality bonds). Yields didn’t change much this week after rising a couple days, then falling back. (We have published a short update on other pricings that occurred at the end of the week, after this summary was prepared. You can see it here under the June 11 entry.)

Our spotlight this week falls on the Carlsbad Unified School District. It sold $53 million of general obligation bonds with an Aa2 rating from Moody’s Investors Service and an AA grade from Standard & Poor’s. This is a good “benchmark” deal to measure current yields available on a solid double-A offering. The five-year maturity yielded a tax-exempt 1.47% and the 10-year bond, 2.93%. Sorry, that isn’t a typographical error. The 10-year maturity didn’t even reach 3%. And how about the 15-year maturity? The yield was 3.99%. Come on, throw us a bone! Throw in an extra basis point and give the poor investor 4.00%. That’s just rubbing their faces in the reality of an issuer’s market. Ha!

Of course, it could have been worse, and it was if you purchased water revenue bonds sold by the Metropolitan Water District of Southern California. This $170 million deal is rated Aa1 by Moody’s, AAA by S&P, and AA+ by Fitch Ratings. The bonds were packed into a few early maturities. The five-year bond yielded a tax-exempt 1.20% and the nine-year, 2.46%. The water district, even after a one-notch downgrade by Fitch, remains a premiere example of an “essential-service” provider. Southern Californians need water and the district is a key player in that equation. Bondholders are getting safety when they buy the district’s debt; in this environment, however, they aren’t getting much yield.

The Imperial Irrigation District priced $75 million electric system revenue bonds this week. They are rated A1 (Moody’s), AA-minus (S&P), and A+ (Fitch). The five-year maturity yielded 1.96% and the 10-year, 3.50%. The 15-year maturity yielded 4.26% and the 20-year, 4.71%. Buyers going out 30 years received a 5.06% yield. This is another example of an essential-service provider, just one that is rated a bit lower. From the standpoint of actual default risk, Imperial Irrigation isn’t much different from the Carlsbad school and Metropolitan Water examples above. It does pay up with higher yields, however, because its financial cushions aren’t the same as M.W.D. and a revenue bond isn’t the same security as a general obligation. We still think it’s an alternative for even a “conservative” investor.

A few other bonds priced this week. Certain school district G.O. deals with Aa3 ratings from Moody’s priced around 1.60% tax-exempt yields in five years, a little above 3.00% in 10 years, and about 4.25% in 15 years. The Santa Clara Unified School District yesterday priced G.O. bonds. Many maturities were not reoffered and we didn’t get a chance yet to check the yields for purposes of more example. S&P rates the debt AA with a “negative” outlook. The San Mateo Union High School District priced $90 million of highly-rated general obligation bonds (Aa1 and AA). However, these were structured as capital appreciation bonds that don’t pay “current” interest on a semiannual basis. The yields were 2.53% in five years, 4.62% in 10 years, and 6.21% in 15 years.

Tax-exempt Rates Steady Again; TRANs Dominate New Issues

(June 3, 2011) -- Tax-exempt rates were a bit lower this week. Certain municipal bond indices for yield estimates remain at the lowest levels since last November after a powerful rally this spring. The new-issue market for long-term bond sales was somewhat slow this week and a couple smaller sales we thought might price are coming next week instead. The biggest sales in the market are in the short-term side. Tax and revenue anticipation note sales, used by governments to manage cash-flow needs, tend to peak around this time of year.

The Southwestern Community College District priced $70 million of general obligation bonds that are rated Aa2 by Moody’s Investors Service and AA-minus by Standard & Poor’s. The Chula Vista-based college district has just celebrated its 50th anniversary. We didn’t follow up and pinpoint the final exact yields but believe the following rates are “in the neighborhood” of where the deal priced. A five-year bond yielded around a tax-exempt 1.75% and a 10-year maturity, 3.20%. The 15-year bond yielded around 4.30% and the longest maturity in the deal (2040), roughly 5.15%. We will plug in exact yields when we check the final scale. Those yield levels are consistent with other recent double-A sales, including the Palm Springs Unified School District deal in late May.

The Sonora Elementary School District priced $3 million of general obligation bonds. This deal is rated A-plus by Standard & Poor’s and also included a financial guarantee from Assured Guaranty Municipal. A five-year bond yielded a tax-exempt 2.68% and a 10-year maturity, 4.15%. The 30-year bond yielded 5.60%.

The Alvord Unified School District priced $57 million of G.O. bonds that carry an A1 rating from Moody’s Investors Service and A+ from Standard & Poor’s. This deal also was insured by AGMuni. Capital appreciation bonds and convertible capital appreciation bonds were used instead of current-interest bonds. A convertible CAB yielded 4.41% in 10 years; a (non-convertible) CAB due in 11 years, 5.68%.

The Inland Development Agency priced $162 million of 30-year tax allocation bonds we mentioned previously. However, the single-A deal includes mandatory tender dates in 2014, 2015, or 2016. The yield was 3.68% on the 2016 tender-date bonds.

Tax and revenue anticipation notes are the biggest deals, dollar-wise, right now. They also offer puny yields. Issuers, whose tax receipts often come in bunches at certain times of year, sell these notes to cover monthly expenses that stay steady. Orange County’s TRANs due on June 29, 2012, yielded 0.27%. San Bernardino County notes, with the same maturity, 0.28%. After doing the taxable equivalent yield we suppose you can argue the return is better than stuffing money in your mattress.

Tax-exempt Rates Steady This Week; New 10-Years at 3.20%? Ouch

(May 27, 2011) -- Tax-exempt rates didn’t change all that much this week, a pause after a steady decline for several weeks. Tax-exempt yields on higher-quality new bonds are decidedly unattractive after a powerful rally. Or are they? As usual, an “attractive” yield depends on each investor’s goals, time frame, etc. All we are saying is that the Bond Advisor discussed a buying opportunity around the beginning of February amid all the “panic” driven by the Chicken Little commentators. Investors could lock in tax-exempt yields of more than 4% on a 10-year bond on all sorts of securities at the time. Now an investor will pay a dearer price to buy higher-quality bonds, as our examples below show.

The Palm Springs Unified School District provided a good “benchmark” example of yields on a higher-quality deal from an issuer with good name recognition. The Palm Springs district priced $75 million of general obligation bonds that are rated AA-minus by Standard & Poor’s. A five-year bond yielded a tax-exempt 1.65% and a 10-year maturity, 3.19%. The 15-year bond yielded 4.21% and the 20-year, 4.67%. If you were looking for a 3%-plus yield, the first opportunity was in 2020 at 3.07%. The deal didn’t pass the 4% mark until the 2024 maturity, at 4.03%.

The Downey Unified School District priced $12 million of general obligation bonds. This deal is rated AA-minus by Standard & Poor’s and provided another example of yields for a decent-quality bond in the current market. A five-year bond yielded a tax-exempt 1.72% and a 10-year maturity, 3.34%. The 15-year bond yielded 4.27% and the 20-year, 4.60%. If you were looking for a 3%-plus yield, the first opportunity was in 2020 at 3.07%. The deal didn’t pass the 4% mark until the 2024 maturity, at 4.03%.

The Walnut Valley Unified School District priced $13 million of general obligation refunding bonds. This deal is rated Aa2 by Moody’s Investors Service and AA-minus by Standard & Poor’s. A five-year bond yielded a tax-exempt 1.65% and a 10-year maturity, 3.14%. The 15-year bond yielded 4.25%. A 30-year maturity in a new-money portion of the school district’s G.O. offering yielded 5.25%.

The West Sacramento Area Flood Control Agency priced $13 million of assessment revenue bonds; they are rated A by S&P and AA-minus by Fitch Ratings. The five-year bond yielded 2.10% and the 10-year, 3.45%. The 15-year maturity yielded 4.50% and the 30-year was in the neighborhood of 5.50%. (The maturity scale that was listed on one data source for this bond deal listed two 2013 maturities and we assume that was incorrect; as a result, yields on that data source were thrown off by a year for all later maturities. We’re assuming we have the right yields above for the bond maturities.)

The Mountain House Public Financing Authority sold $10 million utility systems revenue bonds that are rated A-minus by S&P. The deal financed water, wastewater, and storm drain systems for the Mountain House Community Services District, which serves a 7.5 square-mile area west of Tracy. A five-year maturity yielded a tax-exempt 3.24% and a 10-year, 4.64%. The 15-year bond yielded 5.40% and the 20-year, 5.85%.

A $13 million refunding revenue bond sale in Moorpark benefited the Villa Del Arroyo mobile home park. S&P rates the bonds BBB. A six-year bond yielded a tax-exempt 4.90% and an 11-year, 5.25%. The 15-year bond reached the 6.00% mark and the 20-year maturity, 6.40%.

The Newport-Mesa Unified School District priced $95 million of G.O. bonds that carry an Aa1 rating from Moody’s Investors Service, or one notch below triple-A. Standard & Poor’s rates the bonds AA. Capital appreciation bonds were the main focus of this sale (4.62% in 10 years, 5.92% in 15 years, 6.34% in 20 years). The school district serves Newport Beach and Costa Mesa. A West Sonoma high school district also issued capital appreciation bonds this week, and the Walnut Valley school sale mentioned above also included capital appreciation debt for a new-money portion.

Tax-exempt Rates Finally Rose on One Day! Couldn't Last Forever

(May 20, 2011) -- It had to end sometime. Thursday, May 19, finally saw tax-exempt yields rise for the first time since mid-April, the first pause in a municipal bond rally that lasted for several weeks. Even so, yields generally are at levels last seen in November 2010, before a series of doom-and-gloom predictions hammered the municipal market. The rally, however, has been somewhat uneven. Higher-quality bonds, especially those at double-A levels and above, have tended to rally more than some lower-rated munis.

Pricings in the new-issue market this week provide an example of just how much yields have fallen since earlier in the spring. A $25 million general obligation bond sale by the Tustin Unified School District carried Aa2 and AA ratings from Moody’s Investors Service and Standard & Poor’s, respectively. The five-year bond in this week’s sale yielded 1.52% and the 10-year maturity, 3.17%. In early April a similar deal probably would have paid closer to 2.35% in five years and 3.85% in 10 years (obviously those are rough estimates). The Tustin school facility improvement district bonds yielded 4.25% in 15 years and 4.75% in 20 years.

The Marin Community College District sold $53 million of general obligation bonds this week. Moody’s Investors Service rates the bonds Aa1, one notch below triple-A. Standard & Poor’s rates them AA. Tax-exempt yields on this deal tended to be about one-tenth of a full percentage point lower than the Tustin school examples above, using the 10- to 20-year maturity range for comparison. A double-A Soquel Creek Water District sale of certificates of participation this week yielded a few basis points more than the Tustin school example.

Investors could pick up added yield elsewhere. The Stockton Unified School District sold $72 million of G.O. bonds. The debt is rated A2 and single-A. A five-year maturity yielded a tax-exempt 2.72% and a 10-year, 4.09%. The Stockton school deal included bond insurance from Assured Guaranty Municipal. Most of the Stockton school deal was structured as capital appreciation bonds, as was a sale this week by the Oak Grove Elementary School District.

Community Development Properties Los Angeles County priced $43 million of lease-revenue bonds that are rated Aa3. Yields were in the neighborhood of 2.10% in five years, 3.80% in 10 years, and 4.65% in 15 years. Proceeds will finance a new administration building for the county’s Community Development Commission. In one plus for investors, the lease payments are not subject to abatement, appropriation or completion of the project.

Tax-exempt Rates Still Falling; Double-A Deals See Strong Demand

(May 13, 2011) -- Yields on municipal bonds dropped for yet another week as a month-long rally continued. You can only attribute this to “light” new-issue supply for so long, though that is certainly an important factor underpinning the rally. Some investors also came to their senses after the temporary “panic” caused by wildly-inaccurate predictions of looming municipal bond defaults. The weekly outflows from municipal bond funds also slowed to the lowest level (below $100 million) since the stampede for the exits began. The City of Arcadia and the Los Gatos Union School District were beneficiaries this week of the hunger for highly-rated new bonds; both of them paid less than 4% tax-exempt on 15-year maturities.

Highly-rated borrowers in particular are benefiting from a “seller’s market.“ An example was provided this week when the City of Arcadia sold $8 million of general obligation bonds with an AA+ rating, one notch below triple-A. The 15-year maturity provided a tax-exempt yield of 3.75%. The yield didn’t reach 4.00% until 17 years. The 10-year maturity yielded just a bit above 3%. The Los Gatos Union School District offered $11 million of AA+ general obligation bonds. The 15-year bond yielded a tax-exempt 3.90% and the 20-year, 4.40%. The five-year bonds on both the Arcadia and Los Gatos deals yielded in the neighborhood of 1.50% to 1.70%.

Harvey Mudd College was in the market with $15 million of tax-exempt revenue bonds issued by the California Educational Facilities Authority. A five-year maturity in the Aa3-rated deal yielded 2.39% and a 10-year, 3.75% (the same as Arcadia paid on its 15-year maturity). The 15-year bond yielded 4.52%; the 20-year, 4.97%, and the 30-year maturity, 5.37%.

The San Leandro Unified School District this sold $30 million of G.O. bonds that are rated Aa3 and A+. Moody’s Investors Service recently upgraded the district by one notch. The five-year bond yielded 2.40% and the 10-year, 3.75% (also the same as Arcadia paid on its 15-year maturity). San Leandro’s 15-year bond yielded 4.50% and the 20-year maturity, 5.00%. The Berkeley Unified School District priced AA-minus G.O. bonds with Assured Guaranty Municipal insurance. A 20-year maturity yielded 5.00%.

Tustin, through a financing authority, priced $21 million of double-A water revenue bonds. Sample yields included 4.16% in 15 years and 4.64% in 20 years. The Calistoga Joint Unified School District sold G.O. bonds. A 30-year maturity yielded 4.625%. Many maturities in the Calistoga deal were sold as capital appreciation bonds.

A handful of new bond sales carrying single-A ratings did provide some higher-yielding alternatives this week. The Madera County Board of Education priced $15 million certificates of participation with an A-minus rating. A five-year COP yielded 3.05% and a 10-year, 4.50%. The 15-year maturity yielded 5.37% and the 20-year, 5.87%. The Kaweah Delta Health Care District sold $13 million of revenue bonds with an A3 rating. A seven-year maturity yielded 3.90% and a 10-year, 4.62%. A bond due in 2027 yielded 5.50%. A couple new redevelopment tax allocation bond sales yielded close to 6% in 15 years.

Some Tax-exempt Rates Drop to Levels Last Seen in Late 2010

(May 6, 2011) -- Plunging tax-exempt rates are the biggest story in the municipal bond market. Various indices that track longer-term municipal yields fell close to two-tenths of one percentage point this week. That decline was similar to the drop for U.S. Treasury yields this week. The municipal bond rally that began around mid-April has driven the index measurements lower to yield levels last seen early last December. A steep drop-off in new issuance of tax-exempt bonds is one factor helping boost municipal bonds.

The Ross Valley School District in Marin County this week priced $10 million of general obligation bonds with AA-minus and AA-plus ratings. A seven-year maturity yielded 2.60% and a 10-year, 3.45%. A 15-year bond yielded 4.62% and a 20-year, 5.12%. A 30-year maturity yielded 5.54%.

A handful of new sales with an A+ underlying rating from Standard & Poor’s also featured bond insurance from Assured Guaranty Municipal. Here are some yield examples from those sales. The College of the Sequoias Community College District (Tulare Area Improvement District No. 3) general obligation bonds yielded 3.89% in 2019, 4.26% in 2021, and 5.09% in 2026. Roseville High School District SFID No. 1 general obligation bonds yielded 5.07% in 2026, 5.55% in 2032, and 5.85% on a 30-year maturity. Placentia - Yorba Linda School District certificates of participation yielded 3.15% in five years and 4.50% on a 10-year maturity.

The San Francisco Finance Corp. sold $15 million of lease-revenue bonds with an A1 rating from Moody’s, AA- from S&P, and A+ from Fitch Ratings. The maturities were packed into an early pay-off schedule from 2012 to 2017. A five-year bond due in April 2016 yielded a tax-exempt 2.20% and a bond due in October 2016 yielded 2.33%. A 2017 maturity yielded 2.53%. We don’t usually mention shorter-maturity yields but will do so to provide a couple examples. A two-year bond returned 1.25% and a three-year maturity yielded 1.60%.

The Midpeninsula Regional Open Space District priced its lease-revenue bonds this week. They are rated AA- and AA. We haven’t checked on the final yields. The five-year maturity was in the neighborhood of a tax-exempt 2.5% and the 10-year around 4.10%. The 15-year bond was yielding in the range of 4.90%.

Santa Barbara elementary and high school district G.O. bonds also came to market this week. They are rated Aa2 and A+. However, they were structured as capital appreciation bonds and don’t show up in our yield-example table below. Just as an example, the reported yields on the capital-appreciation debt were 6.77% in 15 years and 7.28% in 20 years. The Beaumont Unified School District also sold capital-appreciation G.O. bonds this week. The Beaumont deal (rated A1) also included some current-interest bonds and we believe the 15-year tax-exempt yield was just a shade under 5.00%. A 20-year maturity yielded in the neighborhood of 5.40%.

Tax-exempt Rates Keep Falling; New Sales Slow, But Good Variety

(April 29, 2011) -- An Anaheim electric revenue bond sale took center stage for new-issue activity in California’s municipal bond market this week. A smaller San Mateo sewer revenue bond provided another “essential” purpose sale. The tax-exempt market continued a rally that has now lasted 12 business days. Some tax-exempt yields fell as much as one-tenth of one percentage point on longer maturities.

The Anaheim Public Financing Authority sale of $90 million electric revenue bonds was rated AA-minus by Fitch Ratings and Standard & Poor’s and A1 by Moody’s Investors Service. A five-year bond yielded a tax-exempt 2.45% and a 10-year bond, 3.82%. The 15-year maturity yielded 4.59% and the 20-year, 5.12%. A 25-year bond yielded 5.40%.

The City of San Mateo sold $32 million of sewer revenue bonds with an Aa2 rating from Moody’s and AA from S&P. The deal illustrates how higher-rated deals still can borrow relatively cheaply, especially in a market starved for new supply. A five-year bond yielded a tax-exempt 1.88%. The 10-year bond yielded 3.34% and the 15-year, 4.27%. The 20-year maturity yielded 4.83% and the 30-year maturity, 5.25%.

The Gavilan Joint Community College District also sold $28 million of higher-rated (Aa2, AA-minus) general obligation bonds this week. We didn’t check on the final rates but we believe the five-year yield was in the neighborhood of 1.90% and the 10-year somewhere around 3.40%. A 20-year maturity yielded in the neighborhood of 5.05%.

The Jefferson School District in San Joaquin County sold $6 million of general obligation bonds that are rated AA-minus by S&P. The five-year bond yielded a tax-exempt 2.20%; the 10-year maturity, 3.56%; the 15-year bond, 4.71%, and the 29-year, 5.68%.

An Atwater financing authority priced $10 million of wastewater revenue bonds rated single-A, and carrying a financial guarantee from Assured Guaranty Municipal. A five-year bond yielded 3.32% and a 10-year, 4.70%. A 15-year bond yielded 5.45%.

The Community Hospital of the Monterey Peninsula was in the market with $31 million of healthcare revenue bonds rated A+ by S&P and AA-minus by Fitch. A five-year bond yielded 3.37% and a 10-year, 4.78%. A 15-year maturity yielded 5.50%. The California Statewide Communities Development Authority served as the issuer.

Tax-exempt Rates Decline on Week-long Rally; No Summary Story

(April 22, 2011) -- Tax-exempt yields declined steadily all week as the municipal bond market continued a rally that began toward the end of last week. We aren’t doing our weekly summary in this space because of limited new-issue pricings, but we do have an abbreviated discussion on our Research page.

Single-A Bonds Took New-Issue Focus; Rates Steadier This Week

(April 15, 2011) -- This week’s new-issue activity in California’s municipal bond market was dominated by a handful of single-A issues. As we noted in our preview of these sales on Monday, “decent” yields are the norm for new single-A deals in the current market. Tax-exempt yields didn’t change much this week following a period of steady increases. U.S. Treasury rates dropped this week.

The M-S-R Public Power Agency sold $34 million subordinate-lien electric revenue refunding bonds to refund certain outstanding debt. Fitch Ratings and Standard & Poor’s grade the new bonds single-A. However, most of the bonds were packed into a relatively early maturity range. A five-year bond yielded a tax-exempt 3.10% and the longest maturity in the deal, a seven-year bond, yielded 3.84%.

The Madera Irrigation District, through a financing authority, sold $32 million of water revenue bonds with an A-minus rating from Standard & Poor’s. S&P also has a “negative” outlook on the Madera Irrigation debt because of “inconsistent” financial performance in the past. Madera is located a little northwest of Fresno. A five-year bond yielded a tax-exempt 3.79%. The 10-year bond yielded 5.27% and the 15-year, 6.00%. The 20-year maturity yielded 6.45% and the 29-year maturity, 6.80%.

A deal that is insured by the state’s “Cal-Mortgage” program priced this week. Such Cal-Mortgage bonds carry the state’s general obligation rating (A1, A-minus) because California’s backing would kick in if the Cal-Mortgage insurance program didn’t cover bond payments in the event a borrower defaulted. The borrower in this week’s sale was the nonprofit Lincoln Glen Manor for Senior Citizens in San Jose. The issuer was the California Municipal Financing Authority. The five-year bond yielded a tax-exempt 3.84%; the 10-year maturity, 5.32%; the 15-year bond, 5.75%, and the 20-year, 6.00%.

The Government of Guam, through an economic development authority, sold $92 million of hotel occupancy tax revenue bonds that we flagged previously. The bonds are rated BBB+ by S&P. Guam bonds’ interest is exempt from federal and state income tax for California residents. Many Guam deals don’t get an investment-grade rating, but investors still wanted juicy yields for this offering. A five-year bond yielded 4.62% and a 10-year, 5.87%. The 15-year maturity yielded 6.72%.

Monrovia’s redevelopment agency paid even higher yields than Guam on an A-minus tax allocation bond priced this week. For example, the five-year maturity yielded 4.80% and the 10-year, 6.15%. The 15-year maturity yielded 6.12% and the 20-year , 6.37%.

School Bonds Took New-Issue Focus; Rates Rose Again This Week

(April 8, 2011) -- A couple weeks ago we said there might be an “upswing” in supply because quite a few issues had been added to our upcoming sales calendar. Unfortunately the upswing, measured more in number of issues than in dollar volume, has a mirage-like appearance to it. New sales of municipal bonds still are tepid at best and the little spike in new issues on our calendar has lost some steam. Tax-exempt yields continued to rise this week, following U.S. Treasury rates higher.

The $28 million San Lorenzo School District general obligation sale this week probably ranked as the main trendsetter one can point to for current-interest bonds; other school deals featured capital-appreciation bonds or taxable Qualified School Construction Bonds. The San Lorenzo school debt was rated A+. Anything below double-A in today’s market tends to pay up a bit. The five-year bond in the sale yielded 3.50% and the 10-year, 4.50%. The 15-year maturity yielded 5.05% and the 30-year, 6.00%.

The Cypress Elementary School District sold G.O. bonds with A+ and AA ratings. A 16-year bond yielded 5.25%. The biggest portion of the sale was structured as capital appreciation bonds, and a 20-year CAB maturity returned 7.47%. The Burlingame Elementary School District also sold capital appreciation G.O. bonds rated Aa2 and AA+. The 20-year CAB maturity yielded 6.86%. Most of the Burlingame sale involved taxable QSCBs.

We haven’t checked on the yields of a couple other school deals that were possibly going to be priced this week. The small sale of double-A general obligation bonds by the Town of San Anselmo also was priced this week, with sample yields in the neighborhood of 2.20% in five years and around 3.60% in 10 years.

San Jose's Deals Offered Yield Contrast; Rates Rose This Week

(April 1, 2011) -- San Jose’s $107 million sale of special hotel tax revenue bonds took the spotlight this week. Remember the days when $100 million-plus municipal bond sales were commonplace? Not anymore. As our Research page notes, first-quarter municipal bond sales volume in California plummeted. However, we stand by last week’s comment that new deals could be rising, at least in terms of number of issuers, based on our sales calendar. It still won’t be anything to write home about. By the way, tax-exempt yields rose this week by as much as one-tenth of a percentage point on longer maturities.

San Jose’s hotel tax bonds carried A2 and A-minus ratings, a sure path to “decent” tax-exempt yields for buyers in today’s market. The five-year bond yielded 3.74%. The 10-year maturity yielded 5.11%. The 15-year bond yielded 5.87%, with the 20-year at 6.31%. A 41-year bond yielded 6.73%. What made the San Jose sale interesting was that the city also sold $31 million of lease revenue bonds for the same project (a convention center expansion and renovation). However, the lease revenue debt carried higher Aa2 and AA+ ratings. The five-year maturity yielded 2.72%, or about a full percentage point less than the hotel tax bonds. The 10-year bond yielded 4.38% and the 15-year, 5.14%. The 20-year maturity yielded 5.61% and the 41-year, 6.00%.

The South Placer Wastewater Authority sold $67 million of wastewater revenue bonds with Aa3 and A+ ratings. The five-year bond yielded 2.67% and the 10-year, 4.07%. The 14-year maturity yielded 4.67%.

The Anaheim City School District priced $30 million of general obligation bonds with Aa3 and A+ ratings. The deal also carried a financial guarantee from Assured Guaranty Municipal. The 15-year bond yielded 4.96%. A three-year maturity was priced to yield a tax-exempt 1.50%. A 39-year maturity yielded 5.78%. The Coalinga-Huron Joint School District priced a mix of current-interest and capital-appreciation bonds. The five-year maturity of current-interest bonds yielded 3.00% (and also included AGM insurance).

The Placentia - Yorba Linda Unified School District sold a G.O. issue with mainly capital appreciation bonds. A current-interest bond due in 2030, or 19 years from now, yielded about 5.16%. Those bonds were rated Aa2.

Tax-exempt Yields Rise on Week; Supply Might Be on Upswing

(March 25, 2011) -- Tax-exempt bond yields rose this week, in part as municipal bonds followed U.S. Treasury rates higher. Depending on which measure you use, tax-exempt yields rose between one-twentieth to one-tenth of one full percentage point this week (or five basis points to 10 basis points). California’s new-issue municipal market might be picking up a little more steam in the weeks ahead. Our forward-calendar of Upcoming Sales keeps growing.

The lowest-yielding deal of the week award goes to a sale we wrote about on March 23 (Research page). The Liberty Union High School District priced $28 million of general obligation bonds and landed some of the lowest new-issue yields we have seen in California in roughly a month. The district’s bonds are rated Aa2 by Moody’s Investors Service. (The district is in Contra Costa County and serves the cities of Brentwood, Oakey, and certain unincorporated communities.) A five-year maturity with a 3% coupon was priced to yield a tax-exempt 2.07%. The 10-year 4% coupon bond was priced to yield 3.43%. The 15-year bond yielded 4.30%. The longest maturity in the deal, 17 years, yielded 4.50%.

The Upland Unified School District priced a mix of current-interest and capital-appreciation bonds this week. Our table below shows a small part of the sale, the Series 2011C current-interest bonds. The Aa2 debt yielded 2.32% in five years, 3.69% in 10 years, and 4.45% in 14 years. Another part of the sale that isn‘t listed in our table below, current-interest G.O. refunding bonds, yielded about 15 basis points more on the same maturities.

Investors looking for diversification outside of traditional tax-backed muni debt had a couple choices. The California Educational Financing Authority sold a small issue on behalf of Claremont University (rated Aa3). The five-year bond yielded 2.60% and the 10-year, 3.85%. A 17-year maturity yielded a tax-exempt 4.87%. The City of Whittier sold health facility bonds on behalf of Presbyterian Intercommunity Hospital. Those bonds, rated A+, yielded 4.07% in seven years and a tax-exempt 4.75% in 10 years. A 20-year bond yielded 6.10%.

Investors looking for high-yielding alternatives had the usual choices this week of redevelopment tax allocation bonds. These bonds are paying up thanks to the uncertainty caused by Governor Jerry Brown’s proposal to dissolve redevelopment agencies in the future. Existing tax allocation bonds couldn’t be undone by Brown’s plan. Brown’s measure recently failed by one vote in the legislature but could be up for another vote soon. The Novato Redevelopment Agency this week sold tax allocation bonds (Hamilton Field project) that paid a tax-exempt 4.65% in five years and 5.90% in 10 years. Those yields are about 250 basis points more than the Liberty Union school example cited above. The Novato TABs are rated Baa1 and A-minus. The 15-year Novato TAB yielded 6.55%. (The Novato TABs were recently upgraded one notch by Standard & Poor’s because concentration in the agency’s 10 leading taxpayers has dropped to 2.8% of incremental assessed value in fiscal 2011. The top 10 concentration was 42% in fiscal 2005, S&P added. The change occurred because developers sold land to homeowners, S&P said.)

The Quartz Hill Water District priced AA-minus certificates of participation this week. The five-year COP yielded 3.50% and the 10-year, 4.75%. A 20-year maturity yielded 5.60%. Our Research page on March 24 featured a longer discussion of a new pricing with a link to the City of Vallejo. We won’t repeat the yield details here.

Tax-exempt Yields Drop;  Riverside County Sells Three TAB Issues

(March 18, 2011) -- Tax-exempt bond yields dropped this week as market turmoil over the Japanese disasters boosted demand for safer securities. U.S. Treasury bonds benefited the most from the flight to quality, but also dragged tax-exempt yields lower. California’s new-issue municipal market was slow again this week, another reason tax-exempt yields keep dropping.

California’s Lemon Grove School District sold $5 million of AA-minus tax-exempt general obligation bonds this week. The yields included 2.36% in five years, 3.60% in 10 years, and 5.04% in 17 years. In contrast, the Riverside County Redevelopment Agency sold A-minus tax allocation bonds (Jurupa Valley project) that paid 6.20% in 10 years and 6.93% in 19 years. This continues a trend we discussed in recent weeks regarding the yield premiums on redevelopment bonds. Riverside County also sold tax allocation bonds for its I-215 and Desert Communities project areas. Those second-lien bonds were rated BBB+ and yielded even more, including a tax-exempt 6.75% or 7.00% in 10 years and above 7% on later maturities. Some of the redevelopment bonds also were priced as capital appreciation securities.

San Francisco’s Redevelopment Agency sold $44 million of tax-exempt bonds backed by hotel tax revenue. The deal earned A1 and A+ ratings and also included a financial guarantee from Assured Guaranty Municipal. The five-year maturity yielded 3.25% and the 10-year, 4.40%. The 14-year bond yielded 5.20%.

Kern County priced $15 million certificates of participation with an A+ rating. The five-year maturity yielded a tax-exempt 3.34%. The eight-year bond yielded 4.10%.

Tax-exempt Yields Little Changed; New-Issue Market Stayed Slow

(March 11, 2011) -- Tax-exempt bond yields barely moved this week after a recent rally that drove rates lower. If anything, yields were slightly higher. U.S. Treasury bonds dropped by as much as one-tenth to two-tenths of a percentage point this week, helped by a declining stock market. California’s new-issue municipal market was slow this week, even as some bigger deals were priced elsewhere in the U.S.

California’s Bennett Valley Union School District sold $7 million of AA-minus and Aa3 tax-exempt general obligation bonds this week. The yields included 2.51% in five years, 3.80% in 10 years, and 4.83% in 15 years. In contrast, the Ukiah Redevelopment Agency sold single-A tax allocation bonds that paid 4.86% in five years and 6.10% in 10 years. This continues a trend we discussed last week regarding the yield premiums on redevelopment bonds.

Santa Clara (Silicon Valley Power) sold $55 million of single-A electric revenue bonds this week, with the deal packed into a handful of longer maturities. The 20-year bond yielded a tax-exempt 5.38%. The California Educational Facilities Authority sold bonds for the private University of San Diego, a Roman Catholic institution. We haven’t seen the final tax-exempt yields but they were in the range of 3.15% in five years and around 4.30% in 10 years. Moody’s rated the bonds A2.

Elsewhere on our site this week, we gave an example of what a triple-A borrower pays on a new issue in the current market. The State of Maryland sold $485 million of general obligation bonds. The retail portion included a five-year maturity that yielded a tax-exempt 1.76%. The 10-year bond yielded 3.00%. The 15-year maturity yielded 3.86%. (A separate deal for bigger institutional buyers tended to yield a bit more, including 3.10% in 10 years.) In contrast, the Puerto Rico general obligation bonds we previewed recently had to yield 5.38% in 15 years and that maturity was guaranteed by Assured Guaranty Municipal. A 21-year unenhanced Puerto Rico bond yielded 6.00% in this week’s new sale. Puerto Rico is rated A3 (Moody’s), BBB (S&P), and BBB+ (Fitch).

Redevelopment Bonds Take Spotlight; 200 Basis Point Spread

(March 4, 2011) -- Believe it or not, California’s municipal bond market still includes something other than redevelopment tax allocation bonds. We know that is hard to believe after redevelopment issuers dominated the new-issue market this week. They will probably keep dominating the market for a time, especially after a key legislative panel yesterday endorsed Governor Jerry Brown’s proposal to curtail future redevelopment efforts. Existing bonds that are validly issued can’t be undone by Brown’s proposal. As a result, issuers are rushing to sell tax allocation bonds that were going to be sold at some point. They also are paying some sweet yield bonuses, as we will explain in a bit about a 200-basis-point spread.

By the way, tax-exempt rates continued to decline this week by a few basis points. Some yield measurements fell to the lowest level since early December. Supply-and-demand continues to explain some of the municipal rally because new-issue sales remain slow. U.S. Treasury bond yields rose by about one-tenth of a percentage point this week. As we predicted a few weeks ago, municipal bonds had room to outperform Treasuries. That is probably less true now, at least for certain maturities.

Redevelopment tax allocation bonds took center stage all week long in California’s new-issue market. We haven’t even had time to digest and summarize all the pricings and will catch up in coming days. This week, however, we did mention a few yield examples on other pages of this site.

There is a great contrast that shows just how much yield investors can pick up on tax-exempt tax allocation bonds. The other day the Coast Unified School District sold a small issue of general obligation bonds (a bit less than $3 million). The five-year tax-exempt yield on that deal, rated Aa3 by Moody’s Investors Service, was 2.91%. In contrast, the Union City Community Redevelopment Agency sold $30 million of tax allocation bonds with a single-A grade from Standard & Poor’s. Those TABs had to pay 4.91% on a five-year maturity. That difference is two full percentage points, otherwise known as 200 basis points. Now granted, the credit ratings are two notches apart, and G.O. security is broader than that for a tax allocation bond. Still, 200 basis points is nothing to sneeze at for an investor with an income-oriented portfolio. The 10-year maturities in those deals preserved the same spread. The school G.O. yielded 4.00% in 10 years and the Union City TAB, 6.00%.

The Union City deal is a good representation of what a single-A TAB yields. The 15-year tax-exempt maturity yielded 6.81%. Other recent city TAB sales with longer maturities tended to pay close to 7.00% and higher for 20-year bonds and beyond. Deals rated A-minus and triple-B are obviously paying more than the Union City example.

Tax-exempt Yields Keep Falling; Double-A G.O. Pays 4.18% to 2021

(Feb. 25, 2011) -- Tax-exempt rates continued to decline this week, pushing some yield measurements to the lowest level since late December. Longer-term bonds dropped more than one-tenth of a full percentage point. For example, the Bond Buyer 20-Bond index of general obligation bonds due in 20 years dropped to 4.95% from 5.10%, the lowest level since December 29, 2010. U.S. Treasury bond yields also dropped this week, in part aided by being a safe haven amid turmoil in Libya and elsewhere in the Middle East. Supply-and-demand still explains some of the municipal rally because new-issue sales remain slow.

The Fremont Redevelopment Agency sale of tax allocation bonds previewed on this site apparently is still pending. We haven’t seen any pricing details yet. The Grossmont Healthcare District priced $137 million of general obligation bonds. The Aa2 sale yielded a tax-exempt 2.77% in five years; a 10-year maturity yielded 4.18%. A 15-year bond was priced to yield a tax-exempt 5.08%. The 20-year maturity yielded 5.65%.

The Northern Humboldt Union High School District also sold G.O. bonds in an $8 million offering rated Aa3 by Moody’s Investors Service. A five-year bond yielded 3.00% and a 10-year, 4.41%. The 15-year maturity yielded 5.24% and the 20-year, 5.66%. The Monterey Peninsula Unified School District priced $35 million of G.O. bonds with an Aa3 Moody’s rating and an A+ from Standard & Poor’s. A bond due in 23 years yielded 5.61% and a 30-year maturity yielded 5.82%. The sale carried an AG Municipal financial guarantee. The sale also included capital appreciation bonds yielding 3.80% in five years, 5.56% in 10 years, and 6.59% in 15 years.

The City of Petaluma priced $22 million of wastewater revenue bonds. Moody’s rates them A1. The bonds due in 21 years were priced to yield a tax-exempt 5.76%. A 25-year maturity yielded 5.83%.

The March Joint Powers Redevelopment Agency sale of tax allocation bonds set the pace for higher-yielding deals. The BBB+ sale for the March Air Force Base Redevelopment Project yielded a tax-exempt 5.40% in five years and 6.75% in 10 years. A three-year maturity yielded 4.50%, more than what double-A issues are yielding in 10 years. The 15-year bond yielded 7.25%.

Tax-exempt Yields Drop; Our Benchmark Sale Yields 4.33% in 2021

(Feb. 18, 2011) -- The big story in the tax-exempt bond market this week revolved around steadily declining yields. By some measurements, longer-term bonds saw yields fall about two-tenths of a full percentage point (or about 20 basis points). Of course, real-world trading in individual bonds can be all over the place, based on the size of the trades, ratings, etc. However, investors seem to be waking up to what we said in our January print edition: tax-exempt bonds are offering a lot of bargains, regardless of your view on where interest rates will go in the future. U.S. Treasury bond yields also dropped this week so, to a degree, municipal rates moved in sympathy with that market. One final note on this week’s yield decline. A “technical” factor still is playing a role because new-issue volume remains slow. Simple supply-and-demand explains some of the municipal rally. On another front, investors are still exiting municipal bond funds, though at a slower pace each week.

The Imperial Irrigation District’s $78 million sale of electric revenue bonds is our “rate trendsetter” for the week. The A1 and AA-minus bonds finance an “essential” purpose, making them popular with a broader set of investors. The district’s sale yielded a tax-exempt 2.81% in five years; a 10-year maturity yielded 4.33%. A 15-year bond was priced to yield a tax-exempt 5.20%. The 20-year maturity yielded 5.29%, and the 30-year bond yielded 5.83%. We updated our February 17 comments on this deal (research page) to add final yields and take out a reference to AG Muni insurance; we don’t believe the deal ended up using a financial guarantee.

Another AA-minus offering this week involved $19 million of water revenue bonds by the Woodland Finance Authority. A five-year bond yielded 3.20% and a 10-year, 4.65%. The 15-year maturity yielded 5.5% and the 30-year, 6.15%.

There were a few other deals priced this week. Some included capital appreciation bonds from school districts. Others included taxable Qualified School Construction Bonds. The Burbank Unified School District sold $13 million of general obligation bonds but packed the entire deal into short-term maturities. The Burbank school bonds due in August 2014 were priced to yield a tax-exempt 1.58%. An Aromas - San Juan Unified School District G.O. structured as a capital appreciation bond yielded 7.67% in 20 years; the sale carried an AG Municipal financial guarantee.

Five-Year Tax-exempt Yield of 4.09% Takes Cake Among New Sales

(Feb. 11, 2011) -- One bond sale in particular caught our attention this week because of some nifty tax-exempt yields, including 4.09% in five years. Of course, that means there is also an interesting credit angle. Tax-exempt yields in general kept ticking higher this week, mainly in sympathy with U.S. Treasury rates. U.S. Treasury yields are rising faster than those in the tax-exempt market. That doesn’t surprise us because muni rates already had quite a run-up after a recent sell-off. Investors are still exiting municipal bond funds, though at a slower pace. U.S. Treasury rates have been rising amid concern over signs of an economic recovery. The market in essence is getting ahead of the Federal Reserve, partly because of fear the Fed will eventually start boosting rates to combat potential inflation risk.

Elsewhere this week we discussed the San Joaquin County Transportation Authority sales tax revenue bond sale. It provided a “benchmark” of sorts for a decent double-A municipal bond. The authority’s new sale yielded a tax-exempt 2.39% in five years; a 10-year maturity yielded 4.10%. A 15-year bond was priced to yield a tax-exempt 5.04%. The 20-year maturity yielded 5.52%, and the 30-year bond yielded 5.75%. This deal is helpful in pegging new-issue yields because many new sales often don’t include a broad maturity range from five to 30 years. As we noted elsewhere, the Taxable Equivalent Yield on the 10- and 15-year maturities ranges from above 6% to above 8% for federal income tax brackets such as 28% or 33%.

Another deal we previewed involved a sale by the California Health Facilities Financing Authority for the Community Program for Persons with Developmental Disabilities in the San Francisco Bay Area. Bond proceeds will refinance loans that helped to acquire and renovate homes for persons with developmental disabilities. The $45 million tax-exempt portion of the sale yielded 4.09% in five years (about what the sales tax revenue bond mentioned above yielded in 10 years). A 10-year bond yielded 5.58% and a 15-year, 6.25%. The bonds are insured by California’s Cal-Mortgage program and ultimately backed by a pledge on parity with a California G.O. That means the credit ratings on the CHFFA deal are the same as the state’s current G.O. grade (A-minus or A1). 

It would be difficult to find many other new sales with tax-exempt yields in that range, but Puerto Rico came close with a general obligation bond sale this week. That deal yielded about 5.5% on a 13-year maturity that included a guarantee from Assured Guaranty Municipal. Puerto Rico bonds are federal and state tax-exempt for California residents.

In an example of a smaller pricing this week, the Piner-Olivet Union Elementary School District sold $8 million tax-exempt G.O. bonds (rated Aa3). The five-year bond yielded 2.75% and and a 10-year, 4.30%. A 14-year maturity yielded 5.12%. The Alhambra Unified School District sold about $26 million G.O. bonds with an Aa3 rating, plus AG Muni bond insurance. However, these were capital-appreciation bonds, not current-interest bonds, so the yield will show up “higher.“ The 20-year maturity yielded 7.32%.

Muni Rates Little Changed During Week When Treasuries Rise

(Feb. 4, 2011) -- The weekly summaries of tax-exempt bond sales are going to return to this page soon, even if new issuance is relatively slow. In general, municipal bond yields were little changed this week based on certain measurements of general obligation and revenue bonds. A 20-bond G.O. index and 11-bond G.O. index were unchanged from a week ago after they dropped from Jan. 20 peaks. In contrast, certain U.S. Treasury bond yields jumped by one-tenth of a percentage point or more in the last week. Our January print edition noted that municipal bonds probably have room to improve vis-à-vis U.S. Treasuries after a recent sell-off that hammered tax-exempt debt. While munis didn’t rally this week, they managed to stay steadier even as U.S. Treasury rates rose. We also noted in January’s edition that a current “buying opportunity,” especially in certain sectors, might hang around longer than the one in late 2008. Munis probably aren’t in a position to stage a powerful rally as they did in early 2009. Tax-exempt rates might drop a bit when new-issue supply is as slow as it has been in 2011. So far, however, such technical factors aren’t having a “normal” impact on rates, in part because several weeks of selling hammered municipal bond funds.

Looking for New Bond Issues? Don't Expect Upsurge Amid Turmoil

(Jan. 31, 2011) -- Very soon we will resume posting popular summaries on yield and market trends, including previews of upcoming sales. A quick comment as the week of Jan. 31 unfolds. New-issue tax-exempt bond volume is off, way off. We expect the final numbers for January will drop to a level the municipal market hasn’t seen in more than a decade. There are a couple reasons driving this trend. First, our new print edition that was just mailed discusses in-depth the turmoil that hit municipal bonds recently. While this turmoil has created opportunities for savvier investors, it created an interest-rate spike that sent many issuers of bonds to the sidelines. Second, the federal giveaway of money (called taxable Build America Bonds) expired at the end of 2010. Many issuers capitalized on this program when rates were still more attractive last year. Don’t be surprised if some issuers wait the current market out. There is room for tax-exempt bonds to rally vis-à-vis Treasury bonds after the recent sell-off.

 "Free" Web Site Updates To Return Soon With Modification

(Jan. 26, 2011) -- In previous updates and in a letter to subscribers, The Bond Advisor noted it had acted against certain individuals who have either misused our content or otherwise distributed it without permission. A new letter going to subscribers on Jan. 29 provides updates on several steps we have taken to deal with such issues and our print publishing schedule, including the plan for resuming "limited" free updates here in February. In the future most updates will be provided only to existing subscribers to the print edition. More to say on this beginning next week.

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The older archived material below will be removed soon for new content.

California Muni Bond Market Aug. 30 -  Sept. 3: Rate Decline Finally Slows

(Examples of Yields on Recent Municipal Bond Sales Are Lower on This Page.)

(Sept. 3) -- Last week we noted that “generic” measures of AAA tax-exempt yields had dropped to levels last recorded in 1967, when Lyndon Johnson was President. These same indices dropped just a little bit more this week, but didn’t change much. California’s new-issue market probably will remain slow next week following the Labor Day break..

Examples of new pricings this week included a $29 million general obligation bond sale by the Fullerton Joint Union High School District. The bonds are rated Aa2. The securities yielded a paltry 1.12% in five years and 2.29% in 10 years. (Both of those maturities featured 4% coupons and were priced to provide those yields.) The 15-year maturity yielded 3.51% and the longest 17-year maturity in the deal, 3.80%.

The California Educational Facilities Authority sold $50 million of revenue bonds on behalf of Santa Clara University. The bonds are rated Aa3. The five-year bond with a 4% coupon was priced to yield 1.42%. The 10-year maturity yielded 2.68%. The 15-year bond yielded 3.42%. An investor had to go out all the way to 20 years to get a tax-exempt 4% yield. The 30-year bond yielded 4.22%.

A handful of other new sales featured capital appreciation bonds. The Colton Joint Unified School District sold such bonds, including Assured Guaranty Municipal bond insurance. A five-year bond yielded 2.29% and a 10-year maturity yielded 3.96%. These bonds are rated Aa3 on their own credit (excluding the AG Muni financial guarantee).

(The Bond Advisor is providing, by early Friday each week, a short summary of recent trends in California's municipal bond market. Individual investors often want to get a quick sense of recent yield trends. In addition, we highlight the yields on a few recent new issues. Just remember that each deal is different and various factors and structuring decisions influence the yields, even among bonds with similar credit characteristics. We rely on underwriters, brokers, and other market participants to provide accurate information about new issue yields, coupons, etc.)

Examples of Yields on Recent Tax-Exempt Municipal Bond Sales

The table below shows sample tax-exempt yields for recent new-issue deals priced in California's municipal bond market. If a bond insurer provides a guarantee, the rating is the "underlying" credit on the bond. If you see AGMuni as the insurer, it is the former FSA.

UPDATED TABLE FOR 2011 IS POSTED HIGHER ON THIS PAGE

Date Size Issuer Rating Insurer 2015 2020 2025 2030 2040
                   
    SEE "RED" NOTE ABOVE FOR UPDATE              
08/10 $    34 mln Goleta Water District COPs        A        N/A      N/A 4.45% 4.98% 35:5.17
08/05 $    80 mln Grossmont Union High School G.O.      Aa2         N/A      N/A      N/A 35:4.77 4.80%
08/04 $      9 mln Lynwood Public Finance Authority revenue        A         N/A 4.58% 5.21% 5.57% 5.77%
08/04 $      3 mln Newport Beach Assessment District No. 100        A-        2.50% 4.00% 4.70%     N/A     N/A 
08/04 $    28 mln Anaheim C.F.D. 08-1 Mello-Roos bonds   Unrated   3.75% 5.05% 5.70% 6.15% 6.35%
08/03 $    10 mln Burlingame Financing Authority revenue       A+    1.90% 3.23%     N/A      N/A     N/A 
07/30 $  111 mln Eisenhower Medical Center revenue bonds  Baa1 / A-   3.48% 4.79% 5.30% 5.67%  5.83%
07/30 $  127 mln Sacramento County San. Dist. revenue  Aa2 / AA   1.64% 2.92% 3.66%     N/A      N/A
07/30 $    35 mln Westside Union School District G.O. bonds       Aa3   1.58% 3.02%  3.98%      N/A 4.76%
07/29 $    86 mln Jurupa P.F.A. superior lien revenue bonds       A- AGMuni 2.60% 4.00%  4.60% 5.00% 39:5.10
07/29 $    63 mln Beverly Hills P.F.A. lease revenue bonds  Aa2 / AA+   1.49% 2.92% 24:3.55     N/A      N/A
07/28 $    20 mln Encinitas P.F.A. lease revenue bonds       AA+   2.02% 3.50%  4.45% 31:4.85      N/A
07/28 $    25 mln Orange C.F.D. 06-1 Mello-Roos bonds   Unrated   3.375% 4.70%  5.35% 5.85% 6.07%
07/28 $    21 mln San Buenaventura certificates of part.       AA- AGMuni 2.08% 3.50% 23:4.13 32:4.95     N/A
07/28 $    24 mln Gilroy P.F.F.A. lease revenue bonds       AA-   2.05% 3.52%  4.36% 33:4.87     N/A
07/27 $    50 mln Oxnard Union High School District G.O.        A+ AGMuni 1.80% 3.15%  4.05% 4.50% 4.78%
07/27 $  129 mln San Francisco Airport Commission revenue  A1/ A / A+       N/A     N/A     N/A 35:5.00 5.03%
07/22 $      6 mln Del Paso Manor Water District COPs        A    3.07% 4.32%     N/A  5.35% 41:5.52
07/22 $ 103 mln San Francisco P.U.C. water revenue  Aa2 / AA-   1.51% 2.80%     N/A      N/A      N/A 
07/22 $   13 mln Tejon Ranch C.F.D. 2008-1 (Mello-Roos)  Unrated   4.75% 6.00% 6.625 7.125 7.375
07/21 $   24 mln City of Gilroy general obligation bond       AA-   1.56% 2.78% 3.60% 4.10% 4.50%
07/20 $   16 mln City of Berkeley general obligation bond Aa2 / AA+   17:2.17 2.75% 3.47% 29:3.88 39:4.36
07/20 $   21 mln Pittsburg Unified School District COPs    A2 / A-    AGC  2.61% 3.95% 4.64% 5.06% 35:5.14
07/20 $   53 mln Southern Calif. Public Power rev. bond    A1 / A-        N/A     N/A  3.94% 4.38% 4.62%
07/20 $   23 mln Sonoma Valley Health Care Dist. GO bond       A1   2.10% 3.25% 4.10% 28:4.35     N/A
07/19 $   36 mln Pasadena electric revenue bond  AA / AA-   1.55% 2.81%     N/A      N/A     N/A
07/16 $      5 mln Santa Cruz City Schools COPs        A AGMuni 2.55% 3.875% 24:4.42     N/A     N/A 
07/15 $  175 mln Los Angeles Community College GO bond  Aa1 / AA       N/A     N/A     N/A     N/A 4.70%
07/15 $   79 mln Los Angeles County M.T.A. general rev.    Aa3 / A   1 97% 3.19%     N/A      N/A      N/A 
07/14 $   89 mln Metro. Water District of Southern Calif.  Aa1/AAA   1.45% 2.79% 3.49% 27:3.68     N/A
07/14 $   65 mln Santa Monica - Malibu School District G.O.  Aa1 / AA   1.51% 2.83% 23:3.32      N/A     N/A 
07/14 $   51 mln Escondido Union High School District COPs        A1 AGMuni 12:1.55     N/A     N/A 5.00% 37:5.14
07/13 $     2 mln Calipatria Redevelopment Agency TABs     BBB+       N/A     N/A     N/A 6.40% 6.50%
07/12 $     8 mln Hemet Unified School District G.O. bonds         A AGMuni 2.25% 3.72%  4.60%     N/A      N/A
07/12 $     8 mln Irwindale CFD No. 1 Mello-Roos bonds         3.95% 5.29%     N/A     N/A      N/A
07/09 $   30 mln Laguna Beach School District G.O. bond  Aa1/AAA   1.47% 2.79% 3.68% 28:3.95     N/A
07/08 $   37 mln USC-SOTO Health Sciences revenue bond       Aa1   1.75% 3.07% 3.93% 4.35%     N/A 
07/08 $   43 mln Tahoe Forest Hospital District G.O. bond       Aa3   2.55% 3.80% 4.45% 4.85% 5.10%
07/08 $  399 mln Virgin Islands P.F.A. "rum" revenue bond Baa2/BBB   3.10% 4.22% 4.95% 29:5.10      N/A
07/07 $     4 mln Stanislaus County Office of Education COP        A  AGMuni 2.65% 3.95% 24:4.45    N/A      N/A 
07/01 $    51 mln Riverside County Redevelopment TABs  Baa2 / A-   4.25% 5.50% 6.05% 6.33% 6.53%
06/30 $     6 mln Riverside County Redevelopment TABs     BBB+   4.25% 5.50% 6.00% 6.35% 6.55%
06/30 $     4 mln El Segundo Unified School District G.O.      Aa2    2.16% 08:3.07     N/A      N/A      N/A 
06/30 $   64 mln Channing House (thru ABAG Finance)        A-  Cal-mort 14:3.25 5.00%     N/A      N/A      N/A 
06/29 $   32 mln Riverside County Redevelopment TABs   A3 / A    3.70% 5.05% 5.55% 5.80% 37:6.02
06/29 $   42 mln Chino Basin Regional Fin. wastewater rev.     Aa2    2.17% 3.55%     N/A      N/A      N/A 
06/29 $   11 mln Rosemead Community Development TABs       A-    3.80% 5.02% 23:5.30     N/A      N/A 
06/29 $   55 mln San Juan Unified School District G.O.     Aa2  AGMuni 2.20% 3.65% 4.20% 4.50% 34:4.75
06/29 $     2 mln Vocational Visions (through CHFFA)        A-  Cal-mort 3.45% 4.70% 5.25%    N/A  35:5.75
06/28 $     3 mln Mendocino Coast Health Care Dist. revenue        A-  Cal-mort 3.05% 4.45% 24:4.85 29:5.10      N/A 
06/24 $   34 mln Ridgecrest Redevelopment Agency TABs     Baa1    3.95% 5.29% 24:5.70     N/A  37:6.40
06/24 $   15 mln Ceres Unified School District G.O. bonds        A+      AGC 2.25% 3.50% 22:3.75      N/A     N/A
06/24 $  1.6 bln Puerto Rico sales tax revenue bonds     A1 / A+       N/A      N/A      N/A  35:5.35 5.50%
06/23 $ 207 mln Guam Power Authority revenue bonds Ba1 / BBB        N/A      N/A      N/A  5.60% 5.73%
06/23 $   18 mln Folsom P.F.A. special tax (CFD) bonds        A-    3.71% 5.02% 24:5.46      N/A     N/A 
06/18 $     7 mln Hercules P.F.A. revenue bonds        A+    3.25% 4.65% 5.10% 5.40% 38:5.60
06/18 $   13 mln Tulare Redevelopment Agency TABs      BBB+       N/A     N/A     N/A 6.20%  6.40%
06/17 $   12 mln Paramount Redevelopment Agency TABs        A-        N/A 5.00% 5.48% 27:5.62      N/A
06/16 $   10 mln Calif. Community College Fin. Auth. lease   AGMuni 2.82% 4.24% 4.83%  5.15% 35:5.28
06/16 $  123 mln San Diego P.F.F.A. water revenue bonds  Aa2 / AA        N/A 22:4.02 4.28% 28:4.49     N/A 
06/16 $   19 mln Eden Township Healthcare District COPs      BBB   4.05% 18:5.10 5.85%  6.10%  34:6.25
06/16 $  255 mln Northern California Power Agency revenue   A3 / A-    2.77% 4.24% 4.75%     N/A      N/A
06/16 $   24 mln Sunnyvale water revenue bonds Aa1 / AAA    1.80% 3.20% 3.87%     N/A  4.50%
06/16 $   35 mln Sunnyvale wastewater revenue bonds Aa2 / AAA   1.80% 3.22% 3.92%    N/A  4.50%
06/15 $   10 mln Antelope Valley Community College COPs     3.25% 4.72%    N/A  5.45% 35:5.60
06/10 $     9 mln Clovis Unified School District COPs       AA-  AGMuni 2.60% 4.00%    N/A     N/A     N/A 
06/10 $     3 mln Duarte Unified School District G.O. bonds      Aa3  AGMuni 2.19% 3.61% 22:3.89    N/A     N/A 
06/10 $ 141 mln Northern California Power Agency revenue Aa2 / AAA   1.77% 19:2.86    N/A     N/A     N/A 
06/09 $   57 mln San Francisco P.U.C. water revenue Aa2 / AA-   1.94% 3.21% 3.74% 4.30%    N/A 
06/09 $   55 mln Palo Alto general obligation bonds Aaa / AAA   14:1.25 21:3.16 3.56% 29:3.86 34:4.375
06/09 $   71 mln Castaic Lake Water Agency COPs      AA-  AGMuni 2.18% 3.50% 4.28% 4.65%    N/A 
06/08 $   12 mln Chino Valley Unified School District COPs       A1  AGMuni 2.64% 3.94%    N/A     N/A     N/A 
06/04 $   51 mln San Marcos Schools Fin. Auth. lease rev.      Aa3  AGMuni 2.60% 3.95% 4.50% 4.90% 5.08%
06/04 $  366 mln Stanford Hospital and Clinics (thru CHFFA)   Aa3 / A+   2.61% 3.84% 4.65% 31:4.90 5.15%
06/03 $    16 mln Thousand Oaks P.F.A. lease revenue       AA    1.99% 3.50% 4.35% 4.70%     N/A 
06/03 $ 101 mln Compton Redevelopment 2nd-lien TABs        A-    3.60% 5.05% 5.35% 5.70% 42:6.10
06/03 $     8 mln San Dimas P.F.A. lease revenue bonds       AA    2.60% 3.90% 4.35%    N/A      N/A 
06/03 $     1 mln Long Beach Assessment Dist. 08-01    Unrated   3.35% 4.65% 5.15% 5.50%     N/A 
06/03 $ 144 mln University of California Regents revenue  Aa1 / AA   2.03% 3.31% 24:3.76     N/A     N/A 
06/02 $   19 mln Santa Barbara County certificates of part.      AA+   2.09% 19:3.30     N/A     N/A     N/A 
05/27 $   48 mln Tamalplais High School District  G.O.      AAA   1.56% 2.81% 3.51% 27:3.65     N/A 
05/27 $   37 mln South Coast Water District revenue      AA+   1.74% 3.03% 3.74% 29:4.02     N/A
05/26 $ 301 mln Southern California Public Power revenue  Aa3 / AA-   16:2.32 3.21% 3.86% 28:4.05     N/A
05/26 $     6 mln Hanford High School District G.O.    A1 /  A+ AGMuni 2.37% 3.76% 23:4.10    N/A      N/A
05/26 $   48 mln San Francisco P.U.C. wastewater revenue  Aa3 / AA-   16:2.24 3.11%    N/A     N/A      N/A 
05/21 $     6 mln Petaluma  Health Center (thru CHFFA)       A-  Cal-mort 3.15% 4.53% 5.07% 5.45% 5.70%
05/21 $   31 mln Lake Elsinore Unified School Dist. COPs       A3  AGMuni 2.75% 4.10% 4.62% 4.95% 42:5.18
05/20 $ 168 mln San Diego P.F.F.A. lease revenue A2/ A- / A+   3.00% 4.43% 26:5.00 5.25% 5.37%
05/20 $   37 mln San Diego County COPs (Salk Institute)       A1    2.88% 4.15% 4.64% 5.00% 5.25%
05/20 $     8 mln Southern Kern Unified School District G.O.       A1  AGMuni 2.43% 3.80% 4.44% 31:4.84    N/A 
05/20 $   16 mln Los Gatos, City of, certificates participation      Aa2    2.00% 3.38% 4.00% 28:4.26    N/A 
05/20 $   52 mln Los Angeles Dept. of Water and Power rev. Aa3 / AA-   2.10% 3.32% 22:3.52    N/A     N/A 
05/20 $ 317 mln Puerto Rico Electric Power Authority rev. A3 / BBB+    21:4.32 4.70% 28:4.80    N/A     N/A 
05/19 $ 185 mln San Francisco Unified School District G.O. Aa2 / AA-   1.96% 3.17% 23:3.50    N/A     N/A 
05/19 $ 155 mln Turlock Irrigation District revenue bonds    A1 / A+    2.30% 3.70% 4.23% 4.59% 4.82%
05/19 $ 139 mln Walnut Center Energy Authority revenue    A1 / A+       N/A     N/A     N/A  4.59% 4.82%
05/19 $    6 mln Berkeley, City of, certificates participation      Aa3    2.48% 3.90% 24:4.26 4.72% 5.02%
05/19 $   62 mln Sanford Consortium Project (Calif. I-Bank)  Aa1 / AA    2.09% 3.42% 4.00% 28:4.24 4.69%
05/19 $     2 mln Pajaro/Sunny Mesa C.S.D. revenue COPs     5.25% 5.90% 6.35% 6.60% 7.00%
05/14 $   15 mln Huntington Beach P.F.A.  lease revenue  Aa3 / AA   2.46% 3.89% 4.39% 4.77%    N/A
05/14 $     7 mln Lakeside Fire Protection District COPs      Aa3     AGC  3.00% 4.05% 4.40% 29:4.85    N/A 
05/12 $   82 mln Yosemite Community College District G.O.      Aa2   2.09% 3.47% 4.20%    N/A     N/A 
05/12 $   10 mln North Kern / Cawelo Auth. water revenue      AA-    2.17% 3.52% 4.12% 4.52% 4.79%
05/11 $   36 mln Oro Grande Elementary School COPs       A-    18:4.75 21:5.17    N/A  5.80% 37:6.00
05/11 $   10 mln Indian Wells Redevelopment Agency TABs       A2    2.75% 4.35% 4.80% 5.18% 34:5.375
05/11 $   19 mln Sierra View Local Health Care Dist. rev.        A    2.92% 4.42% 22:4.60    N/A     N/A 
05/10 $     8 mln Rescue Union School District COPs       A+  AGMuni 2.85% 4.15% 4.67%    N/A  5.19%
05/10 $ 152 mln Coachella Valley Unified School Dist. G.O    A1 / A-  AGMuni 2.55% 4.00% 22:4.25    N/A     N/A 
05/07 $   29 mln Saugus-Hart School Facilities lease rev.    A3 / A AGMuni 2.85% 4.10% 4.57% 4.95% 5.13%
05/07 $     3 mln Woodlake Union High School District G.O.     BBB     AGC  2.40% 3.80% 23:4.10     N/A      N/A 
05/06 $  3 Billion Calif. Dept. of Water Resources power rev.  Aa3 / AA-    2.34% 3.61% 22:3.80     N/A     N/A 
05/06 $   32 mln Marin Municipal Water District water rev.      AA+    16:2.25 3.06% 3.82% 4.15% 4.42%
05/06 $ 136 mln Childrens Hospital L.A. (thru CHFFA)     Baa2     AGC  3.28% 4.51% 4.95% 31:5.20 38:5.34
05/06 $   47 mln Oceanside Unified School Dist. G.O..      Aa3       N/A  3.71% 24:4.16 28:4.69     N/A 
05/06 $    5 mln Santa Cruz P.F.A. lease revenue bonds      AA-     2.25% 3.65% 4.20% 28:4.45     N/A 
05/05 $ 130 mln San Francisco Bay Area Transit sales tax      AA+    1.90% 3.16% 3.65% 28:3.90     N/A 
05/05 $   28 mln Glendale Unified School District G.O.      Aa2    1.98% 3.35% 3.91%    N/A      N/A 
05/04 $     5 mln West Fresno Elementary School Dist. G.O.     BBB+  AGMuni 2.40% 3.85% 23:4.20    N/A      N/A 
05/04 $   11 mln Palm Drive Health Care District COPs       BB       N/A     N/A  7.38% 35:7.80     N/A 
04/30 $   17 mln Garden Grove P.F.A. water revenue bonds       AA    2.07% 3.49% 23:3.84    N/A      N/A 
04/29 $ 158 mln Long Beach harbor revenue bonds  Aa2 / AA    2.06% 3.41% 4.04% 27:4.20     N/A 
04/29 $   15 mln Carmel Unified School District G.O. bonds     AAA    1.71% 2.98% 3.64%    N/A      N/A 
04/29 $   11 mln ABC Unified School District G.O. bonds     Aa3    2.20% 16:2.63    N/A     N/A      N/A 
04/29 $   17 mln Burlingame Elementary School Dist. G.O. Aa2 / AA+   1.72% 3.00% 3.75% 4.25% 34:4.70%
04/29 $     5 mln Jurupa C.S.D. CFD No. 38 (Mello Roos)   Unrated    3.87% 5.00% 5.60% 6.05% 6.375%
04/27 $   18 mln Lake Tahoe Unified School District G.O.  Aa3 / A+     AGC  2.30% 3.62%    N/A     N/A  45:5.04%
04/27 $     4 mln Diablo Water District water revenue COPs      AA-    2.10% 3.60% 4.30% 4.68% 35:4.875
04/23 $ 215 mln Stanford University (through CEFA)     AAA       N/A     N/A     N/A     N/A  4.25%
04/22 $ 994 mln Puerto Rico Electric Power Authority rev. A3 / BBB+   3.00% 4.28% 4.67% 5.06%    N/A 
04/22 $ 159 mln Los Angeles Unified School Dist. G.O.  Aa3 / AA-    2.34% 18:3.20    N/A     N/A     N/A 
04/22 $    6  mln Lancaster Redevelopment Agy. lease rev.        A    3.56% 19:4.96    N/A  28:5.70 6.08%
04/21 $   10 mln Davis Joint Unified School District G.O.       AA-  AGMuni    N/A  23:3.80 4.00%    N/A     N/A
04/19 $   11 mln Lake Elsinore P.F.A. tax allocation bonds        A     AGC  3.00% 4.40% 4.95%    N/A     N/A 
04/19 $     4 mln Salida Union School District COPs        A  AGMuni 16:3.30 4.10% 4.65% 5.06% 5.20%
04/16 $   10 mln Brea Olinda Unified School District G.O.       AA-    2.17% 3.65%    N/A     N/A     N/A 
04/16 $   67 mln San Jose Redevelopment Agency TABs       A2    3.29% 4.70% 5.15% 5.50% 35:5.57
04/16 $   12 mln Brea P.F.A. water revenue bonds       AA    2.15%    N/A     N/A     N/A     N/A 
04/15 $   14 mln Castaic Lake Water Agency COPs   AA / A+    2.17% 3.58% 4.28%    N/A  4.79%
04/15 $     9 mln Portola Valley School District G.O. bonds     AAA    2.00% 3.37% 3.85% 29:4.13    N/A 
04/15 $     3 mln Grass Valley Redevelop. tax allocation        A+ AGMuni 3.06% 4.56% 4.97% 5.15% 34:5.35
04/14 $   12 mln Jefferson Union High School G.O. bonds       A+     AGC  2.46% 3.91% 4.32%    N/A     N/A 
04/14 $   71 mln Calif. Public Works (Univ. of Calif.) lease Aa2 / AA-   2.54% 3.98% 4.42% 4.80% 35:5.00
04/14 $   83 mln Calif. Public Works (Cal. State U.) lease A1 / BBB+    3.31% 4.89% 5.33% 5.625 35:5.73
04/13 $     9 mln Shoreline Unified School District G.O.     AA-    2.10% 3.60% 4.20% 4.60% 35:4.85
04/13 $   31 mln San Francisco Community College G.O.     AA       N/A  22:3.70 24:4.00 4.32% 34:4.62
04/12 $    7 mln Perris P.F.A. tax allocation housing rev.       A    3.50% 5.05% 5.50% 5.90% 6.30%
04/09 $   15 mln Pepperdine University (thru Calif. I-Bank)    Aa3       N/A 3.80% 4.23% 29:4.49    N/A 
04/08 $   14 mln King City High School lease rev. (I-Bank)      A-    3.40% 4.80% 24:5.22 29:5.60    N/A 
04/08 $   14 mln Tustin School District CFD 06-1 Mello Roos  Unrated    3.83% 5.13% 5.58% 5.86% 6.09%
04/06 $ 162 mln San Diego P.F.A. sewer revenue bonds   A2 / A+       N/A     N/A  4.36% 29:4.60    N/A 
04/06 $     2 mln Eastern Municipal Water CFD 2006-52  Unrated    4.00% 5.25% 5.80% 6.20% 37:6.52
04/01 $     2 mln Riverside School District CFD No. 20  Unrated   4.27% 5.50% 6.10% 6.375 6.78%
03/31 $ 201 mln Long Beach Harbor revenue bonds  Aa2 / AA   2.15% 3.56% 4.22%     N/A     N/A
03/31 $   85 mln University of California Regents  bonds      AA    16:2.53 3.56% 26:4.13 4.31% 4.67%
03/31 $   34 mln Richmond Redevelopment Agency TABs       A    3.87% 5.53% 6.00% 6.25% 36:6.40
03/31 $   19 mln Northern Inyo County Hospital Dist. rev.    BBB-   5.00% 21:6.00 6.375%    N/A     N/A 
03/31 $   50 mln Otay Water District water revenue      AA    2.18% 3.61% 24:4.06    N/A     N/A 
03/31 $ 270 mln Calif. Public Works Board lease revenue     Baa2   3.47% 5.10% 5.53% 5.84% 35:5.98
03/31 $   19 mln Cupertino Union School District G.O.     Aa2    2.05% 3.53% 23:3.95    N/A     N/A 
03/26 $ 822 mln Puerto Rico Electric power revenue bonds     BBB+       N/A     N/A  4.76% 27:4.92 5.40%
03/25 $   13 mln Chino CFD No. 2009-1 Mello Roos  Unrated  4.30% 5.60% 6.20% 6.55% 6.80%
03/25 $   93 mln Aspire Public Schools (thru CSCDA)     BBB       N/A  5.00%    N/A  6.00% 6.25%
03/24 $ 930 mln Los Angeles Dept. of Airports revenue  Aa3 / AA   1.91% 3.48% 4.16% 4.53% 4.89%
03/24 $ 100 mln East Side Union High School Dist. G.O.      A     AGC  2.30% 3.85% 4.36% 4.91%    N/A 
03/24 $     9 mln South Pasadena Unified School Dist. G.O.      AA    1.72% 3.20% 24:3.89 28:4.34    N/A 
03/23 $   13 mln Montecito Water District COPs      AA-       N/A  22:3.75 4.13% 29:4.50    N/A 
03/23 $   16 mln San Francisco College District GO   Aa3 / AA   1.65% 17:2.40    N/A     N/A     N/A 
03/19 $     8 mln Huntington Beach Union H.S. Dist. COPs      A  AGMuni 2.54% 4.13% 22:4.40 29:4.90 39:5.29
03/19 $   14 mln Alum Rock Elementary School G.O.     AA-  AGMuni 1.87% 3.43% 4.19%    N/A     N/A 
03/19 $   20 mln UC San Francisco (thru Cal. infra. bank)     Aa2       N/A  21:3.71 4.09%    N/A     N/A 
03/18 $ 618 mln San Francisco Airport revenue bonds   A1 / A+    2.10% 3.69% 4.24%    N/A     N/A 
03/18 $  17 mln Visalia Unified School District      A+    2.00% 17:2.87    N/A     N/A     N/A 
03/17 $  73 mln Contra Costa College District G.O.  Aa2 / AA    1.59% 3.10% 22:3.44    N/A     N/A 
03/17 $  88 mln Burbank electric revenue bonds       A1   1.93% 3.46% 23:3.86    N/A     N/A 
03/17 $ 147 mln California State University revenue bonds Aa3 / A+   2.00% 3.52% 4.08% 4.58%    N/A 
03/17 $   20 mln Pleasant Hill Recreation District G.O.      A+    2.00% 3.35% 4.00% 4.50% 5.00%
03/17 $   21 mln Riverside certificates of participation  A+ / AA-    3.12% 4.60% 5.15% 5.55% 5.80%
03/17 $   85 mln Virgin Islands Water & Power revenue Baa2/BBB   3.33% 18:4.35    N/A     N/A     N/A 
03/16 $   25 mln Tustin Unified School District G.O. Aa3 / AA   1.67% 3.12% 3.87%    N/A     N/A 
03/12 $    9 mln Imperial County certificates of partipation        A  AGMuni 2.60% 4.35% 4.90% 5.13%    N/A 
03/11 $ 2.5 billion State of California general obligation Baa1 / A-   2.57% 19:4.18 4.97% 5.40% 5.65%
03/11 $   16 mln La Habra certificates of participation       A  AGMuni 2.70% 4.35% 24:4.85 5.14% 5.40%
03/11 $   14 mln Santa Monica College COPs  (L.A. pool)      AA-  AGMuni 2.12% 3.51% 23:3.83   N/A    N/A 
03/10 $     7 mln City of Malibu certificates of participation      AA+    2.05% 3.55% 4.30% 4.75% 39:5.05
03/10 $   35 mln Carnegie Institution Washing. (thru CEFA)     Aaa       N/A     N/A     N/A     N/A  4.35%
03/10 $     8 mln Industry Public Facilities Auth. lease rev.       A+    2.95% 4.40%    N/A    N/A      N/A
03/09 $   10 mln Delano Joint Union High School Dist. G.O.        A  AGMuni 2.20% 3.81% 4.48%    N/A  35:5.02
03/09 $   29 mln Mill Valley School District G.O.      AAA        N/A 3.01% 3.56% 29:3.82 34:4.30
03/08 $   65 mln Loyola Marymount University (thru CEFA)      A2    2.72% 4.05% 4.57% 5.00% 5.125%
03/05 $   13 mln Fairfield-Suisun Sewer District   A2 / A+  AGMuni  2.17%    N/A     N/A     N/A     N/A 
03/04 $   29 mln Carmichael Water District COPs      AA    1.77% 3.28% 4.20% 29:4.57    N/A
03/03 $ 126 mln Sacramento County COPs Baa2 / A-   3.77% 5.09% 5.59% 5.95%    N/A 
03/03 $   23 mln Gilroy wastewater revenue bonds      AA    1.67% 3.14% 22:3.44    N/A     N/A 
03/03 $   10 mln La Mirada Redevelopment Agency TABs       A  AGMuni 2.44% 4.14% 4.69% 28:4.92    N/A 
03/03 $     2 mln Town of Moraga COPs     AA+    2.07% 3.60% 4.35% 29:4.77    N/A 
02/26 $     7 mln Ocean View School District COPs       A+  AGMuni 2.27% 3.95% 22:4.20    N/A    N/A
02/25 $   38 mln Central Basin Muni. Water District COPs  A1 / AA  AGMuni 2.00% 3.50% 4.32% 31:4.84 39:5.02
02/24 $     7 mln Pittsburg Unified School District G.O.       A  AGMuni 2.31% 3.90% 23: 4.45    N/A      N/A 
02/24 $   26 mln Tustin Redevelopment tax allocation       A  AGMuni 2.46% 4.14% 4.67% 5.13% 39:5.38 
02/24 $     1 mln Temecula Redevelopment tax allocation       A    14:3.00    N/A    N/A    N/A      N/A 
02/19 $   68 mln Jurupa Comm. Services water  COPs     AA-    2.01% 3.62% 4.25% 4.85%     N/A 
02/19 $   10 mln RNR School CFD No. 92-1 special tax        A    3.12% 4.80% 5.35%    N/A      N/A 
02/18 $ 492 mln Los Angeles Unified School District G.O. Aa3 / AA-   2.25% 3.54% 4.15% 28:4.44 34:4.84%
02/18 $     4 mln Salud Para La Gente (CMFA) revenue      A-  Cal-mort 3.45% 4.80% 5.30%    N/A     N/A 
02/16 $   15 mln El Dorado Irrigation District COPs    A3 / A       N/A  22:4.50 24:4.70    N/A     N/A 
02/12 $     4 mln Castaic Union School District COPs       A AGMuni 2.54% 4.17% 4.74% 33:5.28    N/A 
02/12 $   26 mln Glendale Redevelopment Agency TABs    Baa2   3.89% 5.27% 24:5.65    N/A    N/A
02/12 $   16 mln Val Verde Unified School District G.O.       A AGMuni 2.34% 18:3.43    N/A    N/A     N/A
02/11 $   56 mln Santa Paula Utility Authority water rev.      AA-    2.24% 3.81% 4.49% 4.92% 5.08%
02/11 $     6 mln Santa Paula Utility Authority wastewater      A+    2.50% 4.05%   N/A  5.10% 5.40%
02/10 $   21 mln Calleguas - Las Virgenes water rev. Aa3/ AAA    1.60% 2.99%   N/A     N/A     N/A 
02/10 $   29 mln Chula Vista certificates of participation      A-    3.44% 4.87% 26:5.43 33:5.88    N/A 
02/10 $   13 mln Southwest Community Health (thru CMFA)      A-  Cal-mort 3.14% 4.46% 4.94% 5.52% 6.29%
02/09 $     9 mln Pacific Grove Unified School District G.O.      AA    1.96% 3.30% 3.87% 4.30% 39:4.55%
02/04 $   85 mln Irvine Ranch Water District COPs Aa2 / AA+   1.70% 3.14% 3.90% 4.30%     N/A 
02/04 $ 107 mln American Baptist Homes West (CSCDA) rev    BBB+    4.25% 5.60% 6.055% 29:6.25 39:6.47
02/04 $   52 mln Long Beach Unified School District G.O. Aa3 / AA-   1.88% 3.36% 4.13% 29:4.73    N/A 
02/03 $   18 mln San Jose Unified School District COPs       AA-  AGMuni 2.07% 3.58% 22:3.78    N/A     N/A 
02/03 $ 109 mln Northern California Power Agency revenue   A2 / A    2.58% 4.01% 23:4.31    N/A     N/A 
01/29 $   18 mln Oak Valley Hospital District revenue     BBB-    5.25% 6.25%    N/A  29:6.84 35:7.15%
01/28 $ 1.8 billion Puerto Rico Sales Tax Fin. Corp.  revenue   A2 / A+    16:3.38 4.375 26:5.00 5.32% 42:5.65%
01/28 $ 100 mln Oxnard Financing Authority water revenue      A+    2.38% 3.85% 22:4.15    NA     N/A 
01/28 $   12 mln Milpitas Unified School District      A+    2.35%    N/A     N/A     N/A     N/A 
01/28 $ 237 mln Southern California Public Power revenue  A1 / AA-    2.27% 3.59% 4.21% 4.54%    N/A 
01/28 $   13 mln Truckee P.F.A. tax allocation bonds       A  AG Muni 2.53% 4.15% 24:4.71 5.13% 37:5.375
01/28 $   70 mln San Mateo Union High School Dist. G.O.  Aa2 / AA   1.90% 18:3.00   N/A     N/A     N/A 
01/27 $     5 mln Loomis Union School District COPs       A  AG Muni 2.63% 4.35%    N/A     N/A     N/A 
01/27 $   50 mln Santa Clara County Fin. Auth. lease rev. Aa3 / AA   2.33% 17:3.07    N/A     N/A     N/A 
01/26 $  111 mln Santa Monica Community College G.O.     Aa2    1.84% 3.33% 23:3.70    N/A     N/A 
01/26 $  193 mln East Bay Municipal Utility Dist. water rev.  Aa2 / AA    1.68% 3.15% 3.77% 4.11% 36:4.38%
01/26 $   15 mln Lake Elsinore PFA tax allocation bonds      A    AGC  2.50% 4.20% 23:4.60 33:5.30    N/A 
01/22 $   43 mln San Jacinto Unified School District COPs      A-  AG Muni 2.78% 4.43%  24:4.89  5.22%  5.45%
01/22 $   19 mln Marin Emergency Radio Authority revenue     AA+    2.09% 3.60%    N/A     N/A     N/A 
01/22 $   44 mln Atherton Baptist Homes rev. (Alhambra)     BB       N/A     N/A     N/A  7.50% 7.625%
01/21 $   28 mln Union City Redevelopment Agency TABs       A    2.53% 4.19% 4.82% 5.11%    N/A
01/21 $   55 mln Northern California Power Agency revenue      A3    2.78% 4.25% 4.70%    N/A     N/A 
01/21 $ 158 mln Fresno water system revenue bonds    A / A+   2.43% 3.94% 24:4.35    N/A     N/A 
01/21 $   98 mln San Diego County Water Authority revenue AA+ / Aa3   2.19% 3.59% 3.95% 27:4.08    N/A 
01/21 $   40 mln Madera County (Children's Hospital)   A3 / A-      N/A     N/A     N/A     N/A  36:5.50%
01/14 $   54 mln Atwater wastewater revenue bonds        A  AG Muni 2.25% 4.00% 4.60% 4.90%  5.125%
01/14 $   36 mln Scripps Health (CHFFA)      AA-   2.91% 4.39%    N/A   N/A 36:5.15
01/14 $   70 mln Los Angeles Unified School Dist. COPS      A+    3.12% 17:4.00   N/A    N/A     N/A 
01/14 $     9 mln Eureka Public Financing Auth. lease rev.       A    3.90% 5.12% 5.60% 5.90% 36:6.01
01/13 $     7 mln Loomis Union School District G.O. bonds       A+ AG Muni 2.17% 3.75%  24:4.20     N/A     N/A 
01/12 $   30 mln San Juan Capistrano G.O. bonds     AAA   14:1.41 3.13%  3.46%  3.81%     N/A 
01/11 $   54 mln Casa de las Campanas retirement (ABAG)    BBB+    3.75% 5.15% 24:5.45    N/A 37:6.05
                   
                   
                   
California Muni Bond Market Aug. 23-27: Tax-exempt Rates Time Travel to 1967

(Examples of Yields on Recent Municipal Bond Sales Are Lower on This Page.)

(Aug. 27) -- “Generic” measures of AAA tax-exempt yields dropped this week to levels last seen in 1967. As we said throughout August: The municipal bond market’s big story this summer revolves around declining tax-exempt interest rates.

Along with other factors we have discussed, continuing concern about a sluggish economy has removed fear about inflation pressure. It also is difficult to picture the Federal Reserve raising its target interest rates when the economy has, at best, staggered out of a deep recession.

Examples of new pricings this week show just how low tax-exempt yields have fallen. Forgot getting 4% on a 10-year maturity. On some higher-quality deals you won’t even see 3%. Want proof? The Southern California Public Power Authority sold $514 million of tax-exempt revenue bonds tied to a wind-power project. The AA-minus securities yielded 1.42% in five years and 2.63% in 10 years. The 15-year maturity yielded 3.30% and the 20-year, 3.74%.

The Lawndale Elementary School District priced $16 million of A1 general obligation bonds this week. The bonds are guaranteed by Assured Guaranty Municipal. The five-year maturity yielded 1.35% and the 10-year, 2.58%. A 15-year maturity yielded 3.64%. You could get 4% tax-exempt by purchasing the 17-year maturity.

The Susanville Public Financing Authority priced $35 million of revenue bonds for its Utility Enterprises Project. Standard & Poor’s rated the senior bonds A and Fitch Ratings, A-minus. The senior portion yielded 1.90% in five years. The bonds also carry a financial guarantee from Assured Guaranty Corp. The 10-year maturity yielded 3.15%. A 14-year bond yielded 4.10% and a 20-year bond, 4.75%. A subordinate portion of the sale carried a BBB+ rating from S&P and BBB-minus from Fitch. A 10-year subordinate bond yielded 4.75% and a 20-year, 5.80%.

California Muni Bond Market Aug. 16-20: Tax-exempt Rates Are Still Dropping

(Examples of Yields on Recent Municipal Bond Sales Are Lower on This Page.)

(Aug. 20) -- The municipal bond market’s story this summer revolves around one trend: Declining tax-exempt interest rates. As we said last week, we keep thinking tax-exempt yields can’t get much lower, yet week after week they keep declining. Tax-exempt yields dropped by a few basis points this week on higher-quality municipal bonds.

We repeat what we said last week: There just isn’t all that much supply, relatively speaking, compared with the demand for tax-exempt securities. A flight-to-quality sparked by a weak stock market also has pushed U.S. Treasury yields lower. That trend in turn has helped “safer” municipal bonds. In addition, taxable Build America Bonds keep draining away supply from new issues that would typically be popular with tax-exempt buyers. Money also keeps flowing to the municipal bond funds and they have to put it to work somewhere. Relatively low supply and strong demand add up to lower tax-exempt yields.

The Mountain Empire Unified School District priced a small issue of A1 general obligation bonds this week. The bonds are guaranteed by Assured Guaranty Municipal. The five-year maturity yielded 1.75% and the 10-year, 3.25%.

The Citrus Heights Water District priced $5 million of double-A certificates of participation. The five-year maturity yielded 2.30% and the 10-year, 3.70%.

Next week the Southern California Public Power Authority plans to price $533 million of tax-exempt revenue bonds carrying AA-minus ratings.

California Muni Bond Market Aug. 2 - 6: Fewer New Sales, Yields Keep Dropping

(Aug. 6) -- Tax-exempt yields just keep getting a little lower, dropping again this week by a few basis points mainly on intermediate- and longer-maturities.

In the new-issue market this week a few deals came to market. However, some of them only featured bonds in certain maturities rather than across a spectrum of serial and term bonds. A case in point is the Alameda Municipal Power bond sale that refinanced its existing obligations. The tax-exempt portion of the sale, about $9 million of an overall $32 million issue, was packed into maturities from 2027 to 2030. The 2027 maturity yielded 4.64% and the 2030 maturity, 4.90%. The utility’s bonds were upgraded in July to A+ by both Standard & Poor’s and Fitch Ratings. The rest of the sale came as taxable Build America Bonds.

The San Diego Unified School District sold almost $170 million of general obligation bonds. However, they were structured as capital appreciation bonds rather than current-interest bonds. The deal included mainly longer maturities and the last we checked a 20-year bond was being priced to yield a bit above 6.1%.

The Lynwood Public Financing Authority priced $9 million of tax-exempt lease revenue bonds with a single-A rating. The 10-year maturity yielded 4.58%. The 15-year maturity yielded 5.21% and the 20-year, 5.57%.

As we noted last week, unrated Mello-Roos bonds are one high-yielding option thanks to the general malaise in real estate. This is one area of tax-exempt munis that remains a buyer’s market. Some new deals can still be quite solid, but it isn’t a sector for investing novices or even some experienced investors. The City of Anaheim C.F.D. No. 08-1 (Platinum Triangle) priced $28 million of special tax bonds. The five-year bond yielded a tax-exempt 3.75% and the 10-year, 5.05%. The 15-year bond yielded 5.70%; the 20-year, 6.15%, and the 30-year, 6.35%.

California Muni Bond Market July 26 - 30: Beverly Hills Leads As Yields Decline

(July 30) -- Tax-exempt yields declined again this week by a few basis points on various maturities. In contrast, U.S. Treasury yields rose, confirming our expectation that Treasuries will keep giving up recent gains after a powerful rally.

A “name” issuer came to market. By that we mean the seller has a “name” with wide recognition, in this instance Beverly Hills. The Beverly Hills Public Financing Authority priced $14 million of tax-exempt lease revenue bonds yesterday with Aa2 and AA-plus credit ratings. (The sale includes a far larger taxable portion.) The five-year maturity with a 4% coupon was priced to yield a tax-exempt 1.49%. A 10-year bond with a 4% coupon was priced to yield 2.92%. The longest tax-exempt maturity in the deal yielded 3.55% in 14 years.

The Encinitas Public Financing Authority priced $20 million of tax-exempt lease revenue bonds with an AA-plus rating. The five-year maturity with a 5% coupon was priced to yield 2.02% and the 10-year, 3.50%. The 15-year maturity yielded 4.45% and the 21-year, 4.85%.

The City of San Buenaventura, more commonly known as Ventura, priced $21 million certificates of participation carrying an AA-minus rating. The COPs also are guaranteed by Assured Guaranty Municipal. A five-year maturity with a 4% coupon was priced to yield 2.08%. The 10-year maturity yielded 3.50%. A 22-year bond yielded 4.95%.

As we noted last week, unrated Mello-Roos bonds are one high-yielding option thanks to the general malaise in real estate. This is one area of tax-exempt munis that remains a buyer’s market. Some new deals can still be quite solid, but it isn’t a sector for investing novices or even some experienced investors. The City of Orange C.F.D. No. 06-1 (Del Rio Public Improvements) priced $25 million of special tax bonds. The five-year bond yielded a tax-exempt 3.375% and the 10-year, 4.70%. The 15-year bond yielded 5.35%; the 20-year, 5.85%, and the 30-year, 6.07%. The 74-acre project is supposed to include almost 600 single-family homes when it is built out. The value-to-lien, a measure of land value over bonded indebtedness, is 6.45-to-1 based on assessed property values in fiscal 2010.

The Oxnard Union High School District sold $50 million of general obligation bonds this week. Standard & Poor’s recently upgraded the bonds to A+ from A, citing the district’s maintenance of “strong” reserves. This new bond sale also is backed by a financial guarantee from Assured Guaranty Municipal. A five-year bond with a 4% coupon was priced to yield 1.80%. A 10-year maturity with a 5% coupon was priced to yield 3.15%. The 15-year maturity broke that barrier by yielding 4.05%. The 20-year bond yielded 4.50% and the 30-year, 4.78%.

The California Municipal Finance Authority priced $111 million of revenue bonds for the Eisenhower Medical Center in Rancho Mirage. After recent downgrades this issuer is rated A-minus by Fitch Ratings and Baa1 by Moody’s Investors Service. A three-year bond yielded 2.54% and a 30-year, 5.83%.

Next week the San Diego Unified School District plans to sell double-A G.O. bonds.
California Muni Bond Market July 19 - 23: Tax-exempt Yields Decline Again

(July 23) -- Tax-exempt yields continued to decline this week. A “generic” higher-quality bond might yield as much as one-tenth of a percentage point less than it did a week ago. Federal Reserve Chairman Ben Bernanke told Congress the U.S. economic outlook remains gloomy. His comments boosted bonds because investors expect the Fed to leave interest rates low. Inflation fears also have subsided in the near term.

The San Francisco Public Utilities Commission priced $103 million of tax-exempt water revenue bonds yesterday with Aa2 and AA-minus credit ratings. The five-year maturity with a 5% coupon was priced to yield a tax-exempt 1.51%, with the 10-year yielding 2.80%. The longest tax-exempt maturity in the deal yielded 3.00% in 11 years. A far bigger portion of the sale ($344 million) was structured as taxable Build America Bonds. The taxable yields reportedly ranged from 4.90% in 12 years to 6.00% in 20 years; the taxable portion was not reoffered.

The City of Gilroy priced $24 million of tax-exempt general obligation bonds with an AA-minus rating. The five-year maturity yielded 1.56% and the 10-year, 2.78%. The 15-year maturity yielded 3.60%, the 20-year, 4.10%, and the 30-year, 4.50%. In contrast, the City of Berkeley priced $16 million of G.O. bonds this week with slightly higher credit ratings (Aa2 and AA+). Examples of yields in the Berkeley deal included 2.75% on a 10-year maturity and 3.47% in 15 years.

A handful of recent new double-A sales seemed to settle in narrow yield ranges, give or take a few basis points. The five-year bonds were returning around 1.55% and the 10-year, 2.75%. The 15-year maturities tended to be around 3.50%, though a “lower” double-A might yield an extra one-tenth of a percentage point more. The 20-year bonds in these deals yielded around 3.90% to 4.00% and the 30-year, 4.50% or less.

Single-A credits still are paying up relative to higher-rated credits. The Pittsburg Unified School District this week sold $21 million certificates of participation with A2 and A-minus credit ratings. The deal also included a financial guarantee from Assured Guaranty Corp. The five-year maturity yielded 2.61%, the 10-year, 3.95%, and the 15-year, 4.64%. The 20-year bond yielded 5.06%. These yields are roughly a full percentage point higher than new double-A credits must pay to attract buyers.

The Sonoma Valley Health Care District priced $23 million of A1 general obligation bonds this week. The five-year bond yielded 2.10%, the 10-year, 3.25%, and the 15-year, 4.10%.

Next week’s potential new sales include San Francisco airport revenue bonds; a California Municipal Finance Authority issue on behalf of the Eisenhower Medical Center in Rancho Mirage, and a Sacramento County sanitation district deal. On Tuesday the Oxnard Union High School District plans to price $50 million general obligation bonds.

Unrated Mello-Roos bonds are one high-yielding option thanks to the general malaise in real estate. This is one area of tax-exempt munis that remains a buyer’s market. Some new deals can still be quite solid, but it isn’t a sector for investing novices or even some experienced investors. The Tejon Ranch Public Facilities Financing Authority just priced almost $12.7 million of CFD No. 2008-1 special tax bonds (Tejon Industrial Complex - East). The five-year bond yielded a tax-exempt 4.75% and the 10-year, 6.00%. The 15-year bond yielded 6.62%; the 20-year, 7.12%, and the 30-year, 7.375%. This district is located about 80 miles north of downtown Los Angeles along Interstate 5. The appraised value-to-lien on the roughly 1,000 acres that will generate special taxes to repay the bonds is estimated at 3.46-to-1. (This is obtained by dividing the appraised value of close to $44 million by the almost $13 million of debt.) The official statement provides an extensive discussion of the development plans for this district, including the possibility of more parity debt down the road. The usual warnings about development risk also are discussed.
California Muni Bond Market July 9 - 16: High-quality Issuers Lap Up Low Yields

(July 16) -- We noted in a recent item on the Research page (July 13) that it is still a seller’s market for high-quality bonds. Two California issuers with high credit ratings proved that again this week. Tax-exempt yields in general probably dropped a little this week.

The Metropolitan Water District of Southern California, one of the state’s prominent water wholesalers, priced $89 million of water revenue bonds with Aa1 and AAA credit ratings. The five-year maturity gave a choice of 2.25% or 4% coupons and was priced to yield a tax-exempt 1.45%. The 10-year bond with a choice of 3% or 5% coupons was priced to yield 2.79%. A 15-year maturity with a 5% coupon was priced to yield 3.49%.

Another issuer with high credit ratings (Aa1 and AA), the Santa Monica - Malibu Unified School District, priced almost $11 million of tax-exempt general obligation bonds. The five-year maturity with a 3% coupon was priced to yield 1.51%. The 10-year bond had a 4% coupon and was priced to yield 2.83%.

These low yields from high-rated issuers are also in line with the high-quality Laguna Beach Unified School District sale that was priced a week ago. The Bond Advisor in its July print edition discusses how to deal with these low yields on shorter maturities if you use a barbell strategy when the yield curve is steep. Our barbell strategy has a “twist” and if you are a print subscriber you can review it in July’s story on the current yield curve.

Unfortunately about $54 million of the Santa Monica - Malibu school deal included taxable Build America Bonds, continuing a trend where the federal giveaway of an interest-subsidy has issuers running to sell taxable debt. A 15-year taxable bond in the sale yielded about 5.80%.

The Los Angeles Community College District topped this week’s list of taxable borrowers by selling $900 million of taxable G.O. Build America Bonds. A 32-year maturity yielded a taxable 6.54%. The college district also sold $175 million of tax-exempt general obligation bonds. The entire tax-exempt portion was packed into one 29-year maturity and yielded 4.70%. Even for a California resident in a lower 28% federal income-tax bracket, that tax-exempt rate of 4.70% translates into a Taxable Equivalent Yield of about 7.2%, far more than the taxable BAB. The difference is even larger for those in federal tax brackets of 33% and higher.

A few of this week’s issuers carried lower credit ratings. The Hemet Unified School District sold single-A G.O. bonds that are also guaranteed by AG Municipal. The five-year bond yielded 2.25%, the 10-year, 3.72%, and the 15-year, 4.60%. An investor with a good understanding of a general obligation credit would be thrilled to pick up almost a full percentage point of extra yield on the 10-year maturity compared with this week’s higher-rated deals.

The Escondido Union High School District sold A1 certificates of participation with AG Municipal insurance. A 20-year maturity yielded a tax-exempt 5.00%. The Calipatria Redevelopment Agency priced tax allocation bonds with a BBB+ rating. They yielded a tax-exempt 6.40% in 20 years

California Muni Bond Market July 5 to July 9: Slower Week, More Negative Press

(July 9) -- Tax-exempt bond yields trended lower during a holiday-shortened week. Tax-exempt rates still look attractive relative to U.S. Treasury yields, but that is more a function of a “flight-to-quality” that pushed Treasury rates so much lower the last couple weeks. We would be surprised if Treasury rates don’t bounce a little higher, and in fact the 10-year and 30-year Treasury yields rose this week.

A barrage of negative press continues to hammer at municipal bonds. Our July print edition features our comments from 20 years ago to put some recent "Chicken Little" journalism in perspective. We have seen these panic-filled stories before. In a perverse way the bad press might help higher-rated credits by driving more demand their way, especially for “essential-purpose” revenue bonds that tend to stay steady even in tough times. Lower-rated credits might suffer as the bad press continues if less demand translates into higher yields. Income-oriented investors might find some bargains the lemmings left behind.

Speaking of a higher-rated credit that sells essential-purpose bonds, the Metropolitan Water District of Southern California plans soon to sell up to $100 million of revenue bonds. Fitch Ratings already assigned a triple-A grade to the bonds and S&P probably will do the same. Investors will make a trade-off in the yield they receive in exchange for the “safety” of such a prominent utility. You can’t get a much more “essential purpose” issuer than a water wholesaler in Southern California.

New-issue activity in the California municipal market was a bit lighter because of the holiday-shortened week. We will just provide a couple examples of recent pricings, though there were a handful of other deals sold this week.

The Tahoe Forest Hospital District priced $43 million of general obligation bonds with an Aa3 rating. The five-year maturity carried a 4% coupon and was priced to yield a tax-exempt 2.55%. The 10-year bond with a 4% coupon was priced to yield 3.80%. The 15-year maturity with a 5.5% coupon was priced to yield 4.45%, and the 20-year bond yielded 4.85%. The 30-year maturity yielded 5.10%.

The Stanislaus County Office of Education sold $4 million certificates of participation that are rated single-A on their own. The sale also included a financial guarantee from AG Municipal. The five-year maturity yielded 2.65% and the 10-year, 3.95%. The longest 14-year maturity yielded 4.45%. So the bond insurance basically helped bring the yields lower to a level not far from the hospital district’s G.O. sale above. However, the yields were still a bit higher, in part because COPs tend to get penalized compared with the safer security of a G.O. bond.

The Virgin Islands Public Finance Authority sold bonds tied to rum production. We mentioned the sale earlier this week, and have discussed this credit in past months. The senior bonds carried Baa2 and BBB ratings from Moody’s and S&P, respectively. Fitch rated them BBB+. A 15-year maturity yielded a tax-exempt 4.92% and a 20-year bond, 5.10%. A separate subordinate bond rated a notch lower by S&P and Fitch yielded 4.47% in 10 years.

Taxable Build America Bond sales are slackening a bit as the yields they must offer to entice investors have grown relative to U.S. Treasuries. No doubt some of this yield “widening” reflects to additional investor concern amid the barrage of negative press. However, the yield spread can’t help but widen when U.S. Treasuries have rallied so much, pushing rates on those securities lower. Most municipal issuers still will try to revive taxable BAB sales as soon as possible to lap up a 35% federal subsidy for interest costs that expires at the end of 2010. Congress still might renew taxable BABs after this year, but probably with a lower subsidy.

California Muni Bond Market June 28 to July 2: Munis Cannot Match Treasuries

(July 2) -- Falling yields on U.S. Treasury bonds are the big news in the credit markets. A so-called flight to quality helped push the 30-year Treasury yield to 3.9%, its lowest level in more than a year. In contrast, municipal bond yields only dropped slightly this week. Investors are already balking at the relatively low tax-exempt yields and we doubt muni rates will follow Treasuries lower. If anything, the Treasury rally will have to run out of steam.  

Several new municipal deals priced ahead of the long weekend for July 4. Typically volume will be a little slower during the shortened holiday week after a day off on July 5. This week the Chino Basin Regional Financing Authority priced $42 million of wastewater revenue bonds carrying an Aa2 rating. The five-year bond with a 4% coupon was priced to yield 2.17%. The 10-year maturity featured a 5% coupon and was priced to yield 3.55%.

The El Segundo Unified School District sold $4.5 million of general obligation bonds with maturities ranging from 2011 to 2018. They are rated Aa2. The five-year bond yielded 2.16% and the eight-year, 3.07%.

We featured the San Juan Unified School District $55 million sale of G.O. bonds in a short item earlier this week. It caught our attention because the bonds are rated Aa2. Even so, the deal included AG Municipal bond insurance that is rated a notch lower by Moody’s (Aa3). However, Standard & Poor’s rates the bond insurer AAA. The five-year bond yielded 2.20% and the 10-year, 3.65%. The 15-year maturity yielded 4.20% and the 20-year, 4.50%.

A $3 million health care revenue bond insured by the state’s Cal-Mortgage program also priced this week for the Mendocino Coast Health Care District. Thanks to the state’s insurance these bonds are rated A-minus by Standard & Poor’s. The five-year maturity yielded 3.05% and the 10-year, 4.45%. A 14-year maturity yielded 2.64% and a 19-year, 5.10%. It certainly pays to have Cal-Mortgage insurance on the deal. In May S&P downgraded the Mendocino health district’s 2001 general obligation bonds to an “underlying” B-minus from single-B, citing “weaker financial results.” One of these G.O. bonds due in 19 years traded in late May at about 72.5 cents on the dollar, producing a tax-exempt yield of about 8.1%. The S&P “underlying” rating on the G.O. bonds was at BBB-minus in 2001 when the debt was sold. Bond insurer FGIC guarantees the G.O. bonds. The Mendocino health district operates a 25-bed hospital in Fort Bragg.

The continuing saga of single-A redevelopment bonds that provide juicy tax-exempt yields played out again this week. Riverside County’s Redevelopment Agency priced $32 million of tax allocation bonds for its Desert Communities Redevelopment Project Area. A five-year maturity yielded a tax-exempt 3.70% and a 10-year, 5.05%. the 15-year bond yielded 5.55% and the 20-year, 5.80%. the bonds are rated A3 and A.

Another Riverside County Redevelopment Agency sale was priced for the Mid-County Project Area. The $6 million of TABs are rated BBB+. The five-year bond yielded 4.25% and the 10-year, 5.50%. A tax-exempt yield of 6% on the 15-year maturity no doubt enticed some buyers. A 20-year bond yielded 6.35% and a 30-year, 6.55%.

Yet another Riverside County Redevelopment Agency sale of $52 million was priced for the Interstate 215 Corridor area. These TABs are rated Baa2 and A-. We didn’t see the final yields but we believe these are the levels: The five-year bond yielded 4.25% and the 10-year, 5.5%. A 15-year tax-exempt yielded about 6.05% and the 20-year bond, about 6.33%. and a 30-year, about 6.53%.

The Rosemead Community Development Commission sold $11 million of tax allocation bonds for its merged project area. These TABs are rated A-minus by S&P. The five-year bond was priced to yield a tax-exempt 3.80% and the 10-year bond, 5.02%. The 13-year maturity was the longest in the sale and yielded 5.30%.

The ABAG Finance Authority for Nonprofit Corporations sold $64 million of revenue bonds on behalf of Channing House. The bonds are rated A-minus based on backing from California’s Health Facilities Construction Loan Insurance Program (Cal-Mortgage). Channing House is a retirement care community located in Palo Alto and it is building a new health-care center. The four-year bond yielded 3.25% and the 10-year, 5.00%.

An $11 million sale by the Alameda Public Financing Authority is backed by revenue from land-secured districts. The bonds are rated A-minus. The five-year maturity yielded 3.50% and the nine-year, 4.70%.

(The Bond Advisor is providing, by early Friday each week, a short summary of recent trends in California's municipal bond market. Individual investors often want to get a quick sense of recent yield trends. In addition, we highlight the yields on a few recent new issues. Just remember that each deal is different and various factors and structuring decisions influence the yields, even among bonds with similar credit characteristics. We rely on underwriters, brokers, and other market participants to provide accurate information about new issue yields, coupons, etc.)

California Muni Bond Market June 21 to June 25: Good Mix of New Bond Sales

(June 25) -- Tax-exempt bond yields didn’t change much this week. The Federal Reserve once again said it is sticking to its current policy of leaving target interest rates where they are. Tax-exempt rates look relatively more attractive because they haven’t followed U.S. Treasury yields lower.

The Ceres Unified School District priced $15 million of general obligation bonds with an A+ credit rating. In addition, Assured Guaranty Corp. backs interest and principal payments. A five-year bond yielded 2.25% and a 10-year, 3.50%. A 12-year bond yielded 3.75%.

Puerto Rico and Guam issuers sold bonds that are federal and state tax-exempt for all investors in the 50 U.S. states. Puerto Rico’s sales tax bonds were rated A1 and A+. The 25-year bond yielded 5.35% and the 30-year, 5.50%. Guam Power Authority revenue bonds were rated Ba1 and BBB. The 20-year bond yielded 5.60% and the 30-year, 5.73%. A 27-year maturity in the deal carried AG Municipal bond insurance and yielded 5.22%.

A Folsom Public Finance Authority bond sale is backed by special tax revenue from a community facilities district (Mello-Roos). Standard & Poor’s rated the bonds A-minus. The $18 million tax-exempt portion of the issue yielded 3.71% in five years and 5.02% in 10 years. The 14-year maturity yielded 5.46%.

The California Veterans general obligation bonds that were just upgraded to double-A levels by S&P and Fitch also priced this week. A five-year bond yielded 2.95% and an eight-year, 3.90%. A five-year maturity subject to the federal Alternative Minimum Tax yielded 3.20%.

Huntington Beach City School District sold A1 certificates of participation, mainly as taxable BABs. A tax-exempt COP due in 2015 and insured by AG Municipal yielded 2.70%.

California Muni Bond Market June 14 to June 18: Good Mix of New Bond Sales

(June 18) -- Tax-exempt bond yields rose again this week by a small amount. A mix of borrowers provided a range of yields in the new-issue market.

The City of Sunnyvale set the benchmark for high-quality sales this week. The city’s water revenue bonds were rated AAA by Standard & Poor’s and Aa1 by Moody’s Investors Service. A five-year bond yielded 1.80% and a 10-year, 3.20%. A 15-year bond yielded 3.87% and a 30-year maturity, 4.50%. Sunnyvale also sold wastewater revenue bonds that yielded just a bit more, probably because Moody’s rated them a notch lower at Aa2.

San Diego sold $123 million of double-A water revenue bonds. The 12-year bond yielded 4.02% and the 15-year, 4.28%. The longest 18-year maturity in the deal yielded 4.49%.

Bond insurer Assured Guaranty Municipal backed a $10 million lease revenue bond sale by the California Community College Financing Authority. The deal benefited College of the Sequoias and Kern C.C.D. projects. A five-year tax-exempt bond yielded 2.82% and a 10-year, 4.24%. The 15-year maturity yielded 4.83% and the 20-year, 5.15%.

The Northern California Power Agency sold more bonds for the Lodi Center Energy Project; this portion of the sale carried single-A ratings based on various utility support. Out of the $255 million sale only $78 million came as tax-exempt bonds; the balance involved taxable Build America Bonds. The five-year bond yielded 2.77%, or a full percentage point more than the same issuer paid last week when the higher-rated California Department of Water Resources was backing the debt for the Lodi Center. The 10-year bond yielded 4.24% and the 15-year, 4.75%.

The Modesto Irrigation District sold $100 million of electric system revenue bonds, with the majority of them taxable BABs. The 17-year tax-exempt bond yielded 5.00% and the 22-year, 5.20%. The bonds were rated A2 and A+.

Eden Township Healthcare District priced $19 million of certificates of participation with a triple-B grade from Fitch Ratings. The COPs yielded 4.05% in five years and 5.85% in 15 years. The 20-year maturity yielded 6.10%.

California Muni Bond Market June 7 to June 11: Yields Rise, Insured Issues Return

(June 11) -- Tax-exempt yields made the biggest jump in several weeks, rising as much as one-tenth of a percentage point. The main reason seems to be a "correction" to drum up more buying interest.

Bond insurer Assured Guaranty Municipal showed it can keep landing business, even on deals rated a "low" double-A. The insurer backed several deals this week. Clovis Unified School District priced $9 million of AA- certificates of participation. A five-year tax-exempt COP yielded 2.60% and a 10-year, 4.00%. AGMuni backed $71 million of Castaic Lake Water Agency COPs. The sale yielded 2.18% on a 2015 maturity and 3.50% in 10 years. A 15-year bond yielded 4.28% and a 20-year, 4.65%.

AGMuni also guaranteed $3 million of Aa3 Duarte Unified School District general obligation bonds. The five-year bond yielded 2.19% and the 10-year, 3.61%. AGMuni also guaranteed $6 million of Tahoe-Truckee Unified School District general obligation bonds, and the five-year bond yielded 2.00%.

In contrast, triple-A Palo Alto general obligation bonds yielded 3.16% on an 11-year bond this week. The new double-A San Francisco water revenue bonds yielded 1.94% in five years and 3.21% in 10 years. The 20-year bond yielded 4.30%.

The Northern California Power Agency sold bonds for the Lodi Center Energy Project; this portion of the sale is backed by the California Department of Water Resources and is rated Aa2 and AAA. The five-year bond yielded 1.77% and the nine-year, 2.86%. Most of the deal involved taxable Build America Bonds. NCPA will sell more Lodi Center bonds next week, with single-A ratings based on various utility support.

California Muni Bond Market May 31 to June 4: Yields Steady in Holiday We

(June 4) -- For the second straight week, tax-exempt yields didn't change all that much. The holiday-shortened week also saw some new issues.

The Stanford Hospital and Clinics sale through a state authority (CHFFA) priced the other day. About $298 million of bonds were sold with Aa3 and A+ ratings. A 15-year bond yielded 4.60% and a 21-year, 4.85%. The new University of California Regents general revenue bonds yielded 2.03% in five years and 3.31% in 10 years.

As we expected, the Compton Community Redevelopment Agency had to offer juicy yields on A-minus (S&P) tax allocation bonds. The subordinate-lien sale yielded 3.60% on a 2015 maturity and 5.05% in 10 years. A 15-year bond yielded 5.35% and a 20-year, 5.70%. This deal is a lot safer than the yields might indicate, but then again our view of redevelopment bonds looks beyond the current real estate crunch.

Contrast Compton's sale with the San Dimas issue of $8 million lease revenue bonds (rated AA). These bonds yielded 2.60% in 2015, a full percentage point less than Compton's sale.  The San Dimas bonds yielded 3.90% in 10 years and 4.35% in 15 years.

In a high-quality deal, Santa Barbara County priced $19 million of AA+ certificates of participation. A five-year tax-exempt COP yielded 2.09% and a nine-year, 3.30%.

More one-year tax and revenue anticipation notes priced the other day at a shade under 0.40%.

Next week Palo Alto will sell triple-A general obligation bonds and San Francisco will offer double-A revenue bonds. A few other issues also should price.

California Muni Bond Market May 24 to 28: Triple-A School Deal Leads the Way

(May 28) -- Tax-exempt yields didn't change all that much this week. U.S. Treasuries lost a little ground though remain strong over a flight to safety tied to European credit concerns.

The Tamalplais Union High School District took this week's prize for landing the lowest yields, thanks to a triple-A rating (S&P) on its general obligation bonds. The $48 million sale yielded 1.56% on an August 2015 maturity and only 2.81% in 10 years. A 15-year bond yielded 3.51%.

Contrast that sale with the Hanford Joint Union High School District issue of $6 million G.O. bonds (rated A+ and A1). AG Municipal also guaranteed the principal and interest payments. These G.O. bonds yielded 2.37% in 2015 and 3.76% in 10 years.

In another high-quality deal, Orange County's South Coast Water District priced $37 million of AA+ revenue bonds, with the majority of the deal coming as taxable Build America Bonds. A five-year tax-exempt bond in the sale yielded 1.74% and a 10-year, 3.03%. A 15-year tax-exempt maturity yielded 3.74% and the 19-year, 4.02%.

The Southern California Public Power Authority sold $301 million of Canyon Power Project revenue bonds with Aa3 and AA- ratings. The six-year yield was 2.32%, the 10-year, 3.21%, and the 15-year, 3.86%. An 18-year maturity yielded 4.05%. Almost two-thirds of the sale involved taxable BABs.

The market will be closed Monday for Memorial Day. Look for the Stanford Hospital and Clinics sale next week, along with a University of California issue and a Compton Redevelopment Agency deal.

California Muni Bond Market May 17 to 21: Yields Down, New Issues Pick U

(May 21) -- Tax-exempt yields dropped this week, benefiting in part from stock market jitters. Munis didn't move anywhere close to U.S. Treasuries, whose yields plummeted as a flight to safety continued over European credit concerns. Several new muni deals priced this week, with a good variety of credits.

The San Francisco Unified School District took this week's crown for landing some of the lowest yields, reflecting demand for double-A general obligation bonds. The $185 million sale yielded 1.96% in 2015 and 3.17% in 10 years. A 13-year bond yielded 3.50%.

Los Gatos sold double-A certificates of participation that yielded 2.00% in 2015, 3.38% in 10 years, and 4.00% in 15 years. Berkeley sold COPs rated a notch lower by Moody's (Aa3) and paid 2.48% in five years and 3.90% in 10 years. A 14-year COP yielded 4.26% and the 30-year maturity

AG Municipal guaranteed the principal and interest payments on a G.O. bond sale by the Southern Kern Unified School District. The bonds are rated A1 without the financial guarantee. A five-year G.O. yielded 2.43% and a 10-year, 3.80%. The 15-year bond yielded 4.44%. That G.O. deal would entice us more than the city COP sales mentioned above.

A handful of utility deals also priced. The Puerto Rico Electric Power Authority revenue bonds were priced to yield a tax-exempt 4.32% in 11 years (the shortest maturity in the sale), while the longest maturity of 18 years yielded 4.80%. This A3 / BBB+ issuer is one of our favorite lower-rated municipal utilities because of its monopoly position. The Los Angeles Department of Water and Power also priced its bonds, and a 12-year tax-exempt maturity yielded 3.52% for a deal rated Aa3 and AA-minus. The five-year yielded 2.10% and the 10-year, 3.32%. Turlock Irrigation District sold $155 million of revenue bonds with A1 and A+ ratings. The five-year yield was 2.30%, the 10-year, 3.70%, and the 15-year, 4.23%. A 20-year maturity yielded 4.59% and a 30-year, 4.82%.

California Muni Bond Market May 10 to 14: Yields Higher; Single-A Deals Pay Up

(May 14) -- Tax-exempt yields rose by a small amount this week. Municipal bonds stayed in a narrower range, while U.S. Treasury yields jumped after some of the Greece-related jitters eased. A rush to U.S. Treasuries for safety last week was reversed a bit in recent days.

Single-A new issues remain the place to go if you are looking for tax-exempt yields above 4% in 10 years. The Sierra View Local Health Care District paid 4.42% on a 10-year revenue bond this week. Anything with "health care" in its name and single-A and lower will generally pay a penalty in the municipal market. The Indian Wells Redevelopment Agency sold A2 tax allocation bonds that yielded 4.35% in 10 years. Anything with "redevelopment" in its name and single-A and lower also will generally pay a penalty in the municipal market, reflecting a soft real estate market and a state grab of local money that has been upheld in court ... so far. The court ruling made it clear that the state money grab stands in line behind payments on existing redevelopment bonds. To put these yields in perspective, new double-A tax-exempt bonds yielded about 3.50% in 10 years this week.

Earlier in the week the Coachella Valley Unified School District sold single-A general obligation bonds that yielded 4% in 10 years. AG Municipal guarantees the principal and interest payments. That isn't such a bad return on a G.O. bond. A five-year Coachella G.O. yielded 2.55%.  A five-year Sierra View health care bond yielded 2.92%, and a five-year Indian Wells TAB, 2.75%. New double-A munis yielded closer to 2.10% in five years this week.

The table below provides specific yield examples. The new-issue market next week will include a big Los Angeles Department of Water and Power bond sale; as we noted the other day, however, taxable Build America Bonds will predominate. The San Francisco Unified School District will sell double-A G.O. bonds, including taxable BABs. The Turlock Irrigation District plans to sell revenue bonds. San Diego's lease-revenue bonds also could price next week.

California Muni Bond Market May 3 to 7: Tax-exempt Yields Drop; Lots of Sales

(May 7) -- Tax-exempt yields dropped this week, with some longer-term rates down about one-tenth of a percentage point, following a U.S. Treasury bond rally over the credit fears in Greece. Munis certainly didn't drop as much as Treasuries, but the "flight-to-quality" helped all safer bonds.

More new issues also popped up this week and we expect the lower rates to bring out more sales next week. The California Department of Water Resources ended up selling almost $3 billion of power supply revenue bonds (Aa3/AA-) thanks to good demand. A two-year bond only yielded 0.92%. A five-year yielded 2.34% and a 10-year, 3.61%. The 12-year maturity yielded 3.80%.

Childrens Hospital Los Angeles priced $136 million of bonds through the California Health Facilities Financing Authority. The hospital deal is triple-B on its own credit but included Assured Guaranty Corp. bond insurance. A bond due in 2015 yielded 3.28% and a 10-year, 4.51%. To get a tax-exempt 5% an investor had to go out 16 years.

A BBB+ general obligation bond sold by the West Fresno Elementary School District carried AGMuni bond insurance. A G.O. is safer than a hospital revenue bond and the yields reflected that. A bond due in 2015 yielded 2.40% and a 10-year, 3.85%.

The Oceanside Unified School District sold $47 million of general obligation bonds after Moody's cut the rating one notch to Aa3. A 10-year maturity was priced to yield 3.71% and the 14-year bond yielded 4.16%.

The San Francisco B.A.R.T. sale of AA+ sales tax bonds yielded 1.90% in five years and 3.16% in 10 years. The table below shows other recent yield examples.

The new-issue market next week will feature some smaller sales that have been on our calendar for awhile. We expect issuers to try to seize on the current seller's market.

California Muni Bond Market April 26 to 30: AAA Yields 2.98% on 10-Year Maturity

(Apr. 30) -- Tax-exempt yields fell slightly this week because new supply tapered off. High-rated issuers continue to benefit from a seller's market, with one triple-A new bond only paying 2.98% in years. Here are the details on a few deals that just priced the other day.

The Carmel Unified  School District sold $15 million of tax-exempt general obligation bonds rated AAA. A five-year maturity with a 4% coupon was priced to yield 1.71%. A 10-year bond with a 5% coupon was priced to yield 2.98%. Ouch! (To actually reach 3.00% in 10 years see the Burlingame school pricing below.) The 15-year Carmel school bond yielded 3.64%.

The Burlingame Elementary School District sold $17 million of Aa2 and AA-plus general obligation bonds. A five-year maturity with a 4% coupon was priced to yield 1.72% and a 10-year 4.00% coupon was priced to yield 3.00%. The 15-year bond yielded 3.75% and the 20-year, 4.25%.

Long Beach sold double-A harbor revenue refunding bonds with a 5% coupon priced to yield 2.06%. Ten-year maturities with either 4% or 5% coupons were priced to yield 3.41%. The 15-year bond yielded 4.04%.

California's Department of Water Resources will dominate the new-issue market next week with $2 billion of power supply revenue bonds. They will mature from 2011 to 2022. San Francisco's Bay Area Rapid Transit District takes bids on May 5 for $131 million sales tax-backed bonds.

California Muni Bond Market April 19 to 23: Tax-Exempt Rates Fall in Recent Days

(Apr. 23) -- Tax-exempt yields fell again this week by a few basis points. There isn't a ton of new supply on the horizon, so the trend could continue in coming days.

A couple deals in California this week featured bond insurance from AGMunicipal, which has gone back to the guarantors' " old model" of only insuring municipal bonds.The Salida Union School District sold $4 million of tax-exempt certificates of participation backed by AGMuni, and rated single-A without the bond insurance. A six-year maturity yielded 3.30%. A 10-year COP yielded 4.10%. The 15-year yielded 4.65% and the 20-year, 5.06%.

The Davis Joint Unified School District sold $10 million of AA-minus general obligation bonds with AGMuni insurance. A 13-year maturity yielded 3.80% and a 15-year, 4.00%. (Other maturities weren't reoffered.) The Salida school deal yielded more because of a lower "underlying" rating and the fact it sold COPs rather than safer G.O. bonds.

We mention these two deals because of questions about how the dwindling bond insurance business will fare amid ratings "recalibration." This recalibration will push many municipal bond ratings into the double-A category. If yields eventually drop a bit on those bonds, will issuers see a benefit in bond insurance? As we explained in April's print edition, "recalibration" has an impact in many ways. While what is left of the bond insurers won't be helped, there will still be investor demand for guarantees on COPs and other non-G.O. security. In fact, anything below double-A will still be fair game for bond insurance, along with perceived "weaker" double-A credits. In the long-term, however, recalibration won't help the insurers' growth prospects to an extent, especially if credit spreads tighten.

Puerto Rico power-revenue bonds priced this week yielded almost 5% tax-exempt in 18 years. An investor also could take that over the Salida school COP. The Los Angeles Unified School District priced a taxable deal this week that yielded a bit less than 6% in 17 years.

California Muni Bond Market April 12 to 16: A Triple-A Bond Sale Whips Others

(Apr. 16) -- Tax-exempt yields declined a bit this week on some renewed buying activity. A good blend of issuers also tapped the new-issue market, including a triple-A deal.

The California State Public Works Board sold $71 million of tax-exempt lease-revenue bonds with double-A ratings for University of California projects. A five-year maturity with a 4% coupon was priced to yield 2.54%. A 10-year bond with either 4% or 5% coupons yielded 3.98%. The 15-year yielded 4.42%, the 20-year, 4.80%, and you could get 5% tax-exempt by going out 25 years.

The Public Works Board also sold $83 million of tax-exempt lease-revenue bonds for California State University projects. These bonds are "low" single-A and "high" triple-B. A five-year maturity yielded 3.31% and a 10-year, 4.89%. The 15-year yielded 5.33%, the 20-year 5.625%, and the 25-year 5.73%. Ratings "recalibration" didn't seem to help these lower-rated bonds very much.

Almost $300 million of the Public Works Board deal came as taxable Build America Bonds. Next week the Los Angeles Unified School District plans to sell new G.O. bonds and almost two-thirds will be taxable BABs. Yuk. Other bigger new deals of interest next week might include the lower-rated Children's Hospital of Los Angeles sale we flagged previously and Puerto Rico's power-revenue bonds.

In other new pricings this week, the Portola Valley School District sold general obligation bonds with a triple-A rating from S&P. A five-year bond yielded 2.00% and a 10-year, 3.37%. The 15-year maturity yielded 3.85%. As the table below shows, the Shoreline Unified School District and San Francisco college deals paid less than most borrowers thanks to double-A ratings.

Two A+ new sales included bond insurance from Assured Guaranty subsidiaries. The Jefferson Union High School deal with G.O. security yielded less than the Grass Valley redevelopment bonds, with more than half-of-a-percentage point difference on yields listed below.

Speaking of issuers with a triple-A rating, we still haven't seen a pricing for Stanford University's new bonds through the California Educational Facilities Authority. Perhaps recent yield rises sidelined it temporarily.

California Muni Bond Market April 5 to 9: Not a Lot of New Sales as Yields Rise

(Apr. 9) -- Tax-exempt yields rose this week, mainly on shorter maturities. It isn't unusual to see some selling pressure in April as Uncle Sam gets ready to rake in his April 15 tax booty.

San Diego's $162 million sale of single-A sewer revenue bonds was among the bigger sales. The tax-exempt bonds yielded 4.36% in 15 years, and 4.60% in 19 years. The deal was packed into a narrow range of maturities. We discuss a trend for water and sewer bonds on our Research page.

You can see in our table of recent new issues below that some Mello-Roos bond deals are coming to market. Sophisticated investors willing to be contrarians can reap added yield from such bond sales, thanks in large part to the real estate cloud hanging over the state. The lure? A 4% tax-exempt yield in five years and above 5% on a 10-year bond. These deals aren't for everyone, though, if you don't understand local real estate markets.

An A-minus bond sale by California's infrastructure bank for a King City High School issuer also offered some tasty yields this week, including 4.80% in 10 years. They are lease-revenue bonds, which aren't viewed as highly as a G.O.

We don't believe that Stanford University, with a triple-A rating, priced its new bonds yet through the California Educational Facilities Authority. We do know the State Public Works Board plans to sell more bonds next week.

California Muni Bond Market Mar. 29 to Apr. 2: Slower Sales, Enticing Yields

(Apr. 2) -- Tax-exempt yields didn't change much this week after a recent jump. New sales slowed this week, but one offering by the California State Public Works Board lured investors with tasty yields.

The $270 million Public Works Board lease-revenue bond deal carried triple-B ratings. The tax-exempt sale yielded 3.47% in five years, 5.10% in 10 years, 5.53% in 15 years, and 5.84% in 20 years. The 25-year bond yielded 5.98%.

Contrast those yields with a new G.O. sale by the Cupertino Union School District, with an Aa2 rating. The school paid a 2.05% yield in five years and 3.53% in 10 years. A 13-year bond yielded 3.95%. The state is paying a full percentage point and a half extra over a local school district because of its low rating and budget follies. An income-oriented investor has to love that.

The University of California Regents priced general revenue bonds this week. The double-A deal yielded 2.63% in six years and reached a high of 4.67% in 30 years. The university system benefits from its own separate budget that, while affected by state trends, is still far better managed.

Stanford University has a triple-A rating and plans to sell up to $300 million of bonds next week. The California Educational Facilities Authority is issuing the debt.

By the way, the State Public Works Board also sold taxable Build America Bonds that yielded 8.15% in 25 years. The Taxable Equivalent Yield on this issuer's 25-year tax-exempt bond beats the pants off the taxable BAB, even if you're in the lower 25% federal income tax bracket. The TEY is above 9% for the 28% bracket and above.

California Muni Bond Market March 22 to 26: Rates Rise, Sales Remain Steady

(Mar. 26) -- Tax-exempt yields rose this week, with the trend most pronounced on shorter maturities (12 years or less). The change was easily one-tenth of a percentage point in many instances. U.S. Treasury securities continue to lose ground, pushing their yields higher, and the negative sentiment could be a factor for tax-exempts.

Don't cry for the issuers, though. It is still a seller's market. The Los Angeles Department of Airports sold $930 million of double-A revenue bonds. The deal yielded 1.91% in five years, 3.48% in 10 years, 4.16% in 15 years, and 4.53% in 20 years. The 30-year bond yielded 4.89%. The same issuer was in the market last November and offered tax-exempt yields of 2.41% in five years, 3.90% in 10 years, 4.50% in 15 years, and 5.00% in 20 years. The airport's 30-year bond yielded 5.34% when issued in November. So tax-exempt rates were about a half-point lower for this issuer's newest sale.

The siphoning off of tax-exempt issuance by taxable Build America Bonds is still a factor keeping a lid on tax-exempt yields. The State of California's big taxable sale this week included $2.5 billion of taxable BABs. The deal drew good interest from overseas buyers.

Two school districts squared off this week with general obligation bonds. The South Pasadena USD had the advantage of a double-A  rating and paid 1.72% yield in five years and 3.20% in 10 years. A 14-year bond yielded 3.89%. The East Side Union High School District in San Jose, which was recently downgraded a notch to A by S&P, priced a $100 million G.O. sale this week. It included Assured Guaranty Corp. bond insurance. Its five-year bond yielded 2.30% and the 10-year, 3.85%. A 15-year bond yielded 4.36% and a 20-year, 4.91%.

Next week will see sales from the State Public Works Board and the University of California Regents. A double-A harbor revenue bond sale by Long Beach will set a yield benchmark for higher-quality debt. Childrens Hospital Los Angeles plans a triple-B sale that will offer some yield premium.

California Muni Bond Market March 15 to 19: "Benchmark" Yields to Ponder

(Mar. 19) -- Tax-exempt yields didn't change much this week as several new issues priced in California's municipal bond market. There are a lot of "generic" scales that show various tax-exempt yields depending on a specific credit rating. These certainly have some value, but we also like "real world" benchmarks.

This week, for example, several new municipal issues in California carried an A+ rating and the yields give an idea of the current market for this rating level. Three of those sales yielded a tax-exempt 2.00% on a five-year maturity, and other deals fell within a 1.9% to 2.1% range. The yield table below this article shows these examples, with issues as diverse as San Francisco airport, Burbank electric revenue bonds, and California State University revenue bonds. When you go out to a 10-year maturity some yield differential starts to show up. The Pleasant Hill park district general obligation bond yields a bit less than revenue bonds from other issuers. Just eying the table below the yields grouped around 3.5% in 10 years and 4.1% in 15 years, with the usual variance per each deal.

As usual, a COP deal gets penalized more by investors for offering weaker security, regardless of its credit rating. The City of Riverside sold A+ / AA- certificates of participation with a 3.12% yield in five years and 4.60% in 10 years. The 15-year COP yielded 5.15%. A certificate of participation sale is a weaker security than a G.O. pledge, which explains the higher yields. Contrast that COP sale with a Tustin Unified School District G.O. sale this week (rated Aa3 / AA). The school G.O. only yielded 1.67% in five years and 3.12% in 10 years, with the 15-year bond yielding 3.87%.

A Pleasant Hill park district G.O. was rated A+ and offered a little more yield than the Tustin school deal (again, see table below). A Virgin Islands utility deal priced this week. The triple-B bonds yielded a tax-exempt 4.35% in eight years. A 14-year maturity included AGMuni bond insurance and yielded 4.18%.

The Burbank, Calif. State University, and S.F. airport new issues all included taxable Build America Bonds, siphoning off tax-exempt supply.

The big Los Angeles Airport bond sale we highlighted here is expected to price next week. Puerto Rico's Electric Authority didn't sell power revenue bonds this week but will offer the $850 million issue next week. Last week we said this deal provides an interesting diversification opportunity for California residents. We also discussed the deal here. Interest earned on the Puerto Rico bonds is exempt from both federal and California state income taxes. (A University of California issue through the state's infrastructure bank could price later today, March 19.) Next week there will be the usual mix of smaller sales, including a San Francisco Community College G.O. to a Montecito Water District COP.

California Muni Bond Market March 8 to 12: Several "Davids" Slay Big "Goliath"

(Mar. 12) -- All eyes were on "Goliath" in California's municipal bond market this week as the state sold $2.5 billion of general obligation bonds. Plenty of little "Davids" were also in the market and they slayed the giant based on achieving lower interest costs for their residents. (Or should we say they "slew" the giant? Either way, you get the point.)

Of course, income-oriented bond buyers favored Goliath's sale. Many smaller issuers (the "Davids"), from Malibu to the Mill Valley School District, could borrow at lower rates thanks to the usual demand from "conservative" investors. But other savvy "conservative" investors realized they could profit from the state's woes without taking on added default risk.

The $2.5 billion state G.O. sale was able to lower yields a bit in the final pricing yesterday. A five-year maturity with a 5% coupon was priced at about 111.2 to yield 2.57%. A nine-year bond with a 5% coupon was priced at about 106.1 to yield 4.18%. A 15-year maturity yielded 4.97% and a 20-year, 5.40%. The longest 30-year bond yielded 5.65%. The credit ratings are Baa1 (Moody's), A- (S&P), and BBB (Fitch).

The City of Malibu sold AA+ certificates of participation with a 2.05% yield in five years and 3.55% in 10 years. The 15-year COP yielded 4.30% and a 29-year maturity, 5.05%. A new Mill Valley School district G.O. sale yielded 3.01% in 10 years, or more than a full percentage point less than the state's nine-year maturity.

Our table below lists yields from some other new-issue examples. Private Loyola Marymount University could borrow at lower tax-exempt rates than the state on most maturities, though not by much. That sale was rated A2. The single-A La Habra sale included bond insurance from Assured Guaranty Municipal, but yields were quite juicy because this wasn't a G.O. deal. It was a certification of participation sale, which in general is a weaker security than a G.O.

Next week Puerto Rico's Electric Authority could sell power revenue bonds, providing an interesting diversification opportunity for California residents. Interest earned on the Puerto Rico bonds is exempt from both federal and California state income taxes. California State University also expects to sell systemwide revenue bonds rated Aa3 and A+. We expect several other deals that have been on our calendar for awhile to price next week. They include a University of California issue through the state's infrastructure bank; a Contra Costa Community College G.O.; a San Francisco Airport Commission transaction, and a few other smaller deals as well.

California Muni Bond Market March 1 to 5: Yields Lower, But Not for One County

(Mar. 5) -- Demand for tax-exempt bonds remained steady again, one reason tax-exempt yields dropped again next week. It doesn't help that taxable Build America Bonds are draining supply from the tax-exempt market.

Last week we said Sacramento County planned to sell $126 million of certificates of participation after downgrades by three rating agencies. We also said the yields might entice some buyers willing to take on more credit risk. The credit rating is A- and Baa2 on the COPs, and the rating agencies also have "negative" outlooks until county officials show progress in stopping the red ink.

Sacramento County did in fact get kicked in the teeth by investors over continuing budget deficits. How bad was it? A 10-year maturity with a 5.5% coupon was priced to yield 5.09%. In contrast, double-A issuers paid 3.28% or less on new sales in California's tax-exempt market this week. The county's five-year COP with either a 3.5% or 5% coupon was priced to yield 3.77%. A new Carmichael Water District five-year COP (double-A) was priced this week to yield 1.77%. The county paid a hefty price over its budget deficits and the downgrades. It doesn't help that the county was selling COPs, which usually offer a premium when an issuer is facing stress. COPs don't offer as much security as a G.O. pledge. The county's 15-year COP yielded 5.59% and the 20-year, 5.95%. The Carmichael Water District deal yielded 4.20% in 15 years and 4.57% in 19 years.

The City of Gilroy sold double-A wastewater revenue bonds this week. A five-year maturity with a 4.00% coupon was priced to yield 1.67%, and a 10-year 5% coupon bond yielded 3.14%.

The La Mirada Redevelopment Agency priced single-A tax allocation bonds backed by a guarantee from  Assured Guaranty Municipal. A five-year maturity yielded 2.44% and a 10-year, 4.14%. The 15-year yielded 4.69%.

Last week we talked about the 800-pound gorilla's pending bond sale that hung over the market. That $2 billion tax-exempt California general obligation bond sale will be priced next week. Just remember, higher-rated deals will be priced as well.

California Muni Bond Market Feb. 22 to 26: Yields Lower, All Eyes on State Deal

(Feb. 26) -- The 800-pound gorilla's pending bond sale hung over the market this week. A $2 billion tax-exempt California general obligation bond sale was going to sell next week, then got postponed, then was rescheduled for the week of March 8. The latest details can be found here. Sacramento County plans to sell $129 million of COPs next week and, after downgrades by three rating agencies, the yields might entice some buyers willing to take on more credit risk.

Tax-exempt yields dropped a little this week, not much. Four new issues that priced in recent days all carried Assured Guaranty Municipal bond insurance. (Yesterday, by the way, AGMuni's parent reported fourth-quarter income of $216.7 million, or $1.27 a share. The insurer apparently is making more headway in stabilizing the ship.)

The Central Basin Municipal Water District priced $38 million of certificates of participation rated A1 and AA on their own, plus the bonus of AGMuni insurance. A five-year bond with a 4% coupon was priced to yield 2%. A 10-year bond with a 5% coupon was priced to yield 3.50%. Those kinds of coupons remind us of our February print edition story on "premium" bonds. The 15-year maturity with a 5% coupon yielded 4.32%, and a 29-year bond yielded 5.02%

Two other deals included AGMuni bond insurance: A $7 million Pittsburg Unified School District general obligation bond sale (rated single-A on its own) yielded 2.31% in five years and 3.90% in 10 years. The longest 13-year maturity yielded 4.45% Tustin's redevelopment agency sold $26 million of tax allocation bonds, also rated single-A on their own. They yielded 2.46% in five years and 4.14% in 10 years. The 2025 maturity yielded 4.67% and the 20-year bond, 5.13%. A 2039 maturity yielded 5.38%.

The Fowler Unified School District sold a small $2 million G.O. deal which also carried AGMuni insurance. They were capital appreciation bonds and yielded 5.17% in 2020 and 5.86% in 2025.

Going outside of our borders for a change, we though we would highlight what a triple-A state pays to borrow. (That AAA concept is difficult to grasp given our deficit-ridden state government.) Maryland sold $195 million G.O. bonds in a narrow maturity range. The 10-year bond yielded 2.84%, or more than a full percentage point less than a couple of our single-A insured examples discussed above. In the secondary market a 10-year State of California G.O. yields roughly 4.45%, or roughly 160 basis points more than Maryland. The 13-year Maryland bond yielded 3.31%. Using certain "generic" scales as a guide, California is trading like a "high" triple-B credit, with a bit of bias toward a "low" single-A level. That is good for income-oriented investors, not so hot for taxpayers.

California Muni Bond Market Feb. 15 to 19: Yields Higher, L.A. School's Big Issue

(Feb. 19) -- Tax-exempt yields rose this week, mainly on longer maturities. For the second straight week a taxable Build America Bond is the centerpiece of new-issue activity. The Los Angeles Unified School District sold $1.25 billion G.O.s structured as taxable BABs and $492 million of tax-exempt G.O. bonds (along with a smaller refunding issue).

The Los Angeles school bonds carry lower double-A ratings. The taxable BAB matures in 2034 and yielded 6.758%. A tax-exempt bond on that due date yielded 4.84%. If you do the Taxable Equivalent Yields the school district's tax-exempt 2034 bond is yielding well above 7% or even 8% for investors in the 28% and up federal income tax brackets. These taxable BABs obviously are attracting pension funds and others, not the "traditional" tax-exempt buyer.

The Los Angeles Unified School District's other tax-exempt yields included 2.25% in five years and 3.54% in 10 years. The 2025 maturity yielded 4.15%.

A couple other school districts (Tustin and Central) were in the market this week with G.O. bonds. They were capital appreciation bonds so aren't listed in the table below. The 10-year CABs yielded 4.67% and 4.97% in those deals. Remember, CABs are bought at a steep discount and don't provide regular semiannual "current" interest payments. So the Central school CAB due in 10 years had an initial price just under 60, with 100 being par.

The RNR School Financing Authority priced Mello-Roos bonds (CFD NO. 92-1-A) with a single-A rating from Fitch. The five-year maturity yielded close to 3.1% and the 10-year, about 4.8%.

California Muni Bond Market Feb. 8 to 12: Rates Steady, Taxable Deal Gets Ink

(Feb. 12) -- Tax-exempt yields were generally steady this week, even as U.S. Treasury rates rose. It is a sign of the times that a $400 million taxable BAB sale by the East Bay Municipal Utility District gets a lot of attention from the media. We mention that on our Research page. As usual, you could get some extra tax-exempt yield in this week's new-issue market by going lower in quality (A-) and purchasing a city's certificates of participation. See bottom of this write-up about that deal.

The East Bay MUD bonds, with split double-A and triple-A ratings, yielded a taxable 5.87% in 30 years. A tax-exempt Pacific Grove Unified School District G.O. bond with double-A credit ratings yielded a tax-exempt 4.55% in 29 years. If you do the Taxable Equivalent Yields the school district bond is yielding above 6.4% for a "lower" 25% U.S. tax bracket, and roughly 7% or much higher for the 28% and higher tax brackets (for California residents). So there it is, another taxable BAB that can't compete with tax-exempt yields.

In another sign of a taxable BAB explosion in 2010, before the Feds lower the subsidy giveaway in 2011, the Calleguas - Las Virgenes Public Financing Authority priced $99 million of water revenue bonds this week. About $77 million came as taxable BABs, leaving a few crumbs for the tax-exempt market. These are high quality "essential-purpose" bonds (rated Aa3 and AAA) and the tax-exempt yields reflected that: 1.60% in five years and 2.99% in 10 years. Yes, 2.99%. (Or, you could pick up a full percentage point of yield by purchasing a 12-year water bond in the Santa Paula deal mentioned below. It yielded 4.01%.) The 30-year Calleguas taxable BAB  yielded 5.94% in 30 years, a bit higher than the East Bay MUD deal. The 15-year Calleguas taxable BAB apparently yielded 5.45%, which if accurate is a bit more competitive with tax-exempts for a lower tax brackets.

The Santa Paula Utility Authority priced $56 million of tax-exempt water revenue bonds with an AA- rating. The 4% coupon five-year bond was priced to yield 2.24%. If you don't understand "premium" bonds with such higher coupons, you should have read our February print edition. They can provide certain "protection" for a portfolio. The 10-year bond yielded 3.81% and the 15-year, 4.49%. The 20-year maturity yielded 4.92% and the 30-year bond was a couple basis points under 5.1%.

The Santa Paula authority also priced wastewater revenue bonds with an S&P A+ rating. The yields were a bit higher than the water bonds, including 4.05% in 10 years. A 30-year taxable BAB yielded 7.25%, quite a bit more than the East Bay MUD taxable sale. Then again, Santa Paula's utility doesn't have the size, name recognition, or rating of the bigger MUD.

Chula Vista priced $29 million certificates of participation this week (S&P: A-) and paid 3.44% in five years and 4.87% in 10 years. The 16-year COP yielded 5.43%. Those are pretty good yield premiums, but some safety-oriented investors tend to shy away from either a lower-rated deal or a COP.

After a day off for President's Day next week, the Los Angeles Unified School District will dominate the new-issue market with a tax-exempt sale of about $750 million. It will sell twice as many taxable BABs, we're sorry to say. (We hear the tax-exempt sale might be closer to $455 million but we haven't received a confirmation on that.)

California Muni Bond Market Feb. 1 to 5: Rates Lower, New Deals Slower

(Feb. 5) -- Tax-exempt yields declined this week, in part because they tracked U.S. Treasuries lower. New sales tapered off a bit after a busy week in late January. The San Jose Unified School District sold $18 million certificates of participation (S&P: AA-) with bond insurance from AG Municipal. A five-year COP yielded 2.07% and a 10-year, 3.58%.

Long Beach Unified School District priced $52 million of general obligation bonds with an Aa3 rating. A five-year bond yielded 1.88% and a 10-year, 3.36%. Investors had to go out to 15 years to get a 4.13% yield.

The Northern California Power Agency sale of hydroelectric project revenue bonds carried a single-A rating. A 4% coupon five-year maturity was priced to yield 2.58%, or seven-tenths of a percentage point more than the school sale. The 10-year bond with a 5% coupon yielded 4.01%.

The sales by the school district and by the Northern California Power Agency were on our "old" Upcoming Sales calendar in December, but we didn't switch them to our new list because the pricings didn't occur right away. (By the way, the East Bay Municipal Utility District still plans a $400 million water revenue bond sale but it isn't on our calendar because they are all taxable BABs.)

Our February print edition is being wrapped up on Friday and will mail by Feb. 6.

We are updating our new-issue yields again below on a regular basis. Our upcoming sales chart also is being refreshed regularly.

California Muni Bond Market Jan. 25 to 29: Busy Calendar, Long Yields Rise Most

(Jan. 29) -- Tax-exempt yields generally rose in recent days. The change was most apparent on longer maturities, where yields might be one-tenth of a percentage point higher than they were a week or so ago.

Our chart below of recent tax-exempt yields gives a quick overview of how various new deals priced this week. We aren't providing our usual information in this update because of a deadline to complete our "second" print edition this month. It was a decent week for new-issue pricings, with a good mix of credit quality and types of bonds.

We already mentioned some pricing highlights in updates earlier this week. We found the Puerto Rico sale appealing for tax-exempt buyers in California. A single-A bond with a yield of 4.375% in 10 years was enticing. In contrast, double-A new sales this week yielded 3.15% or 3.33%, as the chart below shows. The Puerto Rico deal also offered 5.00% in 16 years. You can't even get close to that much yield on a higher-quality 30-year tax-exempt bond. The East Bay M.U.D. deal yielded 4.38% in 26 years.

Of course, 30-year tax-exempt bonds in the new-issue market can be hard to find. Many issuers are selling longer maturities as taxable Build America Bonds. For example, while we list the sales amount for the San Mateo school deal below as $70 million, about $65 million actually came as taxable BABs. Even the smaller Truckee sale included taxable BABs.

We are updating our new-issue yields again below on a regular basis. Our upcoming sales chart also is being refreshed regularly.

California Muni Bond Market Jan. 18 to 22: Water Authority Deal an Omen of 2010

(Jan. 22) -- This week's bond sale by the San Diego County Water Authority is an unfortunate omen for the year ahead. The water authority priced about $98 million of tax-exempt bonds. It sold $528 million taxable Build America Bonds to cash in on the federal giveaway of taxpayer dollars masquerading as a "stimulus" program. As we have noted before, the Feds are crazy to subsidize 35% of the interest costs of these taxable deals.

That means the tax-exempt market lost more than four-fifths of this deal to the taxable arena. For quality-conscious tax-exempt buyers that really hurts because the San Diego County Water Authority is a prominent utility with good credit ratings (in the double-A category).

The authority's water revenue bonds due in five years carried a 4% coupon and were priced to yield 2.19%. The 10-year bond with a 4% coupon was priced to yield 3.59%. The 2025 bond yielded 3.95% and the 2027 maturity, 4.08%. These yields are another omen of things to come in 2010. If you buy high-quality bonds for a diversified portfolio they will drag your yields lower.

The San Diego authority's taxable BAB was packed into a 2049 maturity and yielded 6.138%. Last week an investor could have purchased single-A Atwater wastewater revenue bonds, with a financial guaranty from AGmuni, and get a tax-exempt 5.125% on a 2039 maturity. Most taxable BABs just aren't that attractive for a tax-exempt buyer.

Madera County sold $40 million certificates of participation on behalf of Children's Hospital Central California. The COPs are rated A3 and A- and have a "positive" outlook thanks to solid financial results in recent years. They were packed into one 2036 maturity and yielded a tax-exempt 5.50%. These securities, while of lower credit quality than the San Diego water revenue bond, provide a ton more Taxable Equivalent Yield than the taxable BAB cited above.

After we wrote last week's summary the Cardiff School District priced $5 million of general obligation bonds (the district is fresh off a recent two-notch upgrade by S&P to AA). A five-year bond with a 4% coupon was priced to yield 1.95%.

We are updating our new-issue yields again below. Our upcoming sales chart will be posted again next week.

California Muni Bond Market Jan. 11 to 15: New Sales Kick Start 2010 Activity

(Jan. 15) -- Yields didn't change much this week but not because of a slow market. Several issuers brought new deals.

The Los Angeles Unified School District sold $70 million refunding certificates of participation, carrying an A+ rating. The December 2014 maturity with a 4% coupon was priced to yield 2.63%. A December 2017 maturity with a 5% coupon was priced to yield 4%.

Scripps Health sold AA- (S&P and Fitch) bonds through a state health authority. The following maturities all had 5% coupons and were priced to yield: 2.91% in 2015, 4.39% in 2020, and 5.15% in 2036.

San Juan Capistrano, recently upgraded to AAA by S&P, sold $30 million G.O. bonds. A 2014 maturity yielded 1.41% and a 10-year, 3.13%. The 2025 bond yielded 3.46% and the 2030 maturity, 3.81%.

Atwater priced $54 million of wastewater revenue bonds with a single-A rating. They are insured by Assured Guaranty Muni (the "old" FSA). The 2015 bond yielded 2.25%, the 2020 bond, 4%. The 15-year maturity yielded 4.60%, the 20-year, 4.90%. The 30-year bond yielded 5.125%.

Palm Springs Unified School District sold $110 million general obligation bonds. They are rated AA- by S&P after a recent upgrade. The bond due in 2020 yielded 3.50% and the 2024 maturity yielded 4.05%. The 2033 maturity yielded 4.57%. We are featuring "odd" year maturity examples because some of these school bonds weren't re-offered.

As we said last week, we still need to do some housekeeping in mid-January, especially to clean up our list of Upcoming Sales. We also are going to archive the list of yield results below and start fresh in 2010. All that will now be updated by Jan. 23.

California Muni Bond Market Jan. 4 to 8: Yields Up, New Issues Still Sluggish

(Jan. 8) -- As expected after a holiday lull, new issuance didn't pick up a lot during the first week of 2010. There were a few big deals elsewhere in the U.S.; the California new-issue market was relatively quiet. Yields generally rose.

The Los Angeles Unified School District will sell refunding certificates of participation next week. Scripps Health also is selling AA- (S&P) bonds through a state health authority. The Palm Springs Unified School District and San Juan Capistrano both plan to sell G.O. bonds next week, and Atwater is offering wastewater revenue bonds. These deals will provide a good benchmark for yields as the new year begins.

This week Thousand Oaks sold $12 million wastewater revenue bonds. They are rated AAA by S&P. The bond due in October 2014 yielded 1.40% and the October 2015 maturity yielded 1.85%. The 2019 bond yielded 3.05%.

We still need to do some housekeeping in mid-January, especially to clean up our list of Upcoming Sales. We also are going to archive the list of yield results below and start fresh in 2010. All that will be updated by Jan. 16.

California Muni Bond Market Dec. 14 - 18: Year-end Fling For New-Issue Market

(Dec. 18) -- Tax-exempt yields didn't change much in recent days as the secondary market grew a little quieter ahead of the year's close. As expected, however, the new-issue market stayed busy with more than a dozen pricings in California. New-issue activity will grind to a halt the next couple weeks, though a few deals will still price.

A ratio of longer-term tax-exempt yields to the 30-year Treasury bond, which we often cite in our print edition, dropped a little below 95% the other day. A year ago this ratio soared above 200% during the December 2008 "panic" when ill-informed investors dumped municipal bonds. Late last year we said investors should be buying municipal bonds, not selling them.

The Thacher School, an Ojai-based boarding school we highlighted recently when the bond sale was looming, this week priced $36 million of revenue bonds through the California Enterprise Development Authority. A five-year bond with a 4% coupon was priced to yield 2.00%. A 10-year 5% coupon bond was priced to yield 3.51%. The 15-year maturity yielded 4.18%, the 20-year, 4.75%, and the 30-year, 5.08%. S&P rated the bonds AA-.

A Camarillo development commission sold tax allocation bonds. The 2014 maturity yielded 3.45% and the 10-year bond, 5.00%. S&P rated this deal A-. The 15-year bond yielded 5.45% and the 20-year, 5.82%. Redevelopment bonds will keep providing yield opportunities in the current real estate market.

Monterey County priced $44 million of certificates of participation with an AA rating from S&P and an A3 Moody's grade. Yes, that is a four-notch difference in those ratings. Assured Guaranty Corp. insures the bonds. A five-year COP yielded 2.66% and a 10-year, 4.11%. A 2023 maturity yielded 4.50%.

A California school financing corporation sold general obligation revenue bonds due in 2032 and backed by Assured Guaranty Municipal. They yielded 5.11%. The zero-coupon portion of the sale (for Azusa Unified School District, rated AA- by S&P) yielded 3.06% in 2014, 5.11% in 2019, 5.97% in 2024, and 6.47% in 2030.

California Muni Bond Market Dec. 7 to Dec. 11: Yield Pain in the Five-Year Range

(Dec. 11) -- The recent municipal bond rally continues to hit yields, especially on certain maturities. Tax-exempt yields continued to drop this week, though on Thursday they reversed course and rose by a few basis points. Five-year tax-exempt bonds are again yielding less than 2% in the new-issue market for "decent" higher-quality credits. The Fremont Unified School District priced G.O. bonds this week to yield 1.80% in 2014 (carrying a 4% coupon). The 10-year bond with a 4% coupon was priced to yield 3.30%. The bonds are low double-A or high single-A, depending on the rating agency. The Menlo Park Fire Protection District priced AA+ certificates of participation and paid 1.84% in five years and 3.48% in 10 years.

A taxable Build America Bond from the fire district yielded about 7.29% in 30 years. A California resident in the 28% federal tax bracket could (roughly) match that with a 4.75% tax-exempt yield, such as a 10-year San Francisco redevelopment bond offered recently. We would take the single-A redevelopment bond in 10 years over the 30-year taxable for obvious reasons.

In another market development unfolding in recent days, a bond trader told us that municipal debt backed by the two Assured Guaranty insurers has benefited from the company's recent stock sale. The stock proceeds should help the bond insurers avoid a downgrade. In response, muni bonds with Assured Guaranty backing now trade a bit better. The trader told us yields had dropped a quarter-point on some of these bonds in the secondary market in recent days. Some say yields have dropped even more than that on quite a few Assured Guaranty-backed bonds. In any event the outlook for the Assured Guaranty bond insurers is a bit more upbeat after the stock sale bolstered capital.

A Folsom financing authority just priced $16 million of water revenue bonds with an underlying A3 rating and insurance from Assured Guaranty Municipal. A five-year bond yielded 1.90%, a 10-year 3.35%, and a 15-year, 4.15%. Those yields definitely reflect some value in the bond insurance over what an A3 credit would pay on its own. AGMuni is the "old" FSA that was acquired by Assured Guaranty, and now it only insures municipal bonds. Assured Guaranty Corp. also insures munis along with other securities.

Los Angeles recently priced its solid waste revenue bonds in a deal exceeding $100 million. We aren't sure we ever saw the final yields, but we believe they were coming in somewhere around 1.57% on a bond maturing in February 2014 and 3.25% on a February 2019 due date.

Investors with an appetite for lower-rated munis could consider the Virgin Islands P.F.A Cruzan "rum" subordinate revenue bonds we highlighted recently. The BBB-minus deal priced this week and yielded a tax-exempt 3.87% in 10 years, 5.20% in 10 years, and 6% in 30 years.

California Muni Bond Market Nov. 30 to Dec. 4: Tax-exempt Rates Dropping Again

(Dec. 4) -- Tax-exempt municipal bond prices posted a week of gains, meaning yields declined. This trend often pops up near the end of the year, when new supply starts to drop and demand from maturing investments remains steady. We also think the issuance of taxable Build America Bonds (BABs) is still a factor because it cuts into tax-exempt supply. Shorter-term muni yields also have dropped again after investors concluded the Federal Reserve won't be raising rates any time soon.

As we predicted recently, the Southern California Metropolitan Water District was bound to get low rates on its triple-A general obligation bond sale. The relatively small $46 million issue priced with a 1.43% yield on a bond due in 2014 and 2.75% on a 10-year maturity. It paid 3.41% on a 15-year bond and 3.74% on a 19-year maturity.

Our December print edition discusses ways to pick up yield on lower-rated deals while offsetting risk by staying "short." A prime example this week: The Western Placer Unified School District sold single-A certificates of participation this week with a 2.75% yield on a five-year maturity, or the same rate the MWD paid on a 10-year bond. The school COP yielded 4.31% in 10 years and 4.89% in 15 years. A 21-year bond yielded 5.36% and a "long" 40-year term bond, 6.08%. Los Angeles sold lease revenue bonds this week with yields a bit higher than the school COP deal.

Speaking of high-rated deals, a Santa Monica authority sold lease revenue bonds rated one notch below triple-A. A five-year bond yielded 1.57% and a 10-year, 3.11%. A San Mateo County authority sold lease revenue bonds in the double-A category. A five-year maturity with a 3% coupon was priced to yield 2.21%. A 10-year bond (including 4% and 5% coupons) yielded 3.80%. The 15-year yielded 4.44%.

San Bernardino County sold single-A COPs this week and paid 5.47% on the longest 17-year maturity. The University of California sold pooled medical center bonds, but $429 million of the deal came as taxable BABs. The $93 million tax-exempt portion included a 5.10% yield on a 29-year maturity. Thanks to the over-generous federal interest subsidy on taxable BABs, the university could sell taxable debt yielding 6.58% in 40 years for an actual cost of 4.29%.

California Muni Bond Market Nov. 23 to 27: Beverly Hills Thankful for High Ratings

(Nov. 25) -- We are posting an abbreviated weekly review early because of Thanksgiving. We might add a paragraph or two on Friday, but that tends to be a very quiet day in the municipal bond market. Tax-exempt yields dropped a little so far this week.

We wish all a happy and restful Thanksgiving.

Beverly Hills had much to be thankful for this week as it priced $72 million of lease revenue bonds through a financing authority. Its high credit ratings (Aa2 and AA+) translated into low yields. A five-year maturity with a 5% coupon was priced to yield 1.74%. A 10-year bond (including 4% and 5% coupons) yielded 3.16%. The 15-year yielded 4.03%. A 20-year maturity yielded 4.52%, and the 30-year, 5.06%.

In contrast, the Chawanakee Unified School District sold $12 million of certificates of participation rated A- by Standard & Poor's. Almost $10 million came as taxable Build America Bonds (BABs). The $2 million tax-exempt portion yielded 3.85% in five years, 5.125% in 10 years, 5.50% in 15 years, 6.20% in 20 years, and 6.55% in 30 years. That is quite a difference compared with the Beverly Hills deal.

Next week's new-issue market will pick up after the short holiday week. San Bernardino County plans to sell $286 million COPs. Los Angeles will price $120 million lease revenue bonds, fresh off a one-notch downgrade by Fitch Ratings. The Southern California Metropolitan Water District will sell high-quality bonds at low yields (think Beverly Hills, but perhaps a little lower depending on market conditions). A handful of other issuers will be in the market, including University of California pooled medical center bonds (but much of that deal will be taxable BABs).

California Muni Bond Market Nov. 16 to 20: The Good Vs. The Bad (and Ugly)

(Nov. 20) -- It was the "good" versus the "bad and ugly" in California's municipal bond market this week. The California Department of Water Resources represented the "good" because of high Aa2 and AAA ratings on a sale of $169 million of water bonds. The California State Public Works Board represented the "bad and ugly" with credit ratings of Baa2 and A- (and BBB- from Fitch) for a reduced $743 million sale of lease revenue bonds.

New-issue activity will slow in coming days because of the Thanksgiving break. However, a high-quality AA+ sale from Beverly Hills could price next week.

The state Water Resources bond provided a good "benchmark" of what high-quality deals now yield. A five-year maturity yielded a paltry 1.86%. In contrast, the lower-rated Public Works Board deal yielded 3.79% on a five-year maturity. The water bond in 10 years, 3.20%, versus a whopping 5.10% for the Public Works Board issue. On a 20-year bond the Water Resources came in at 4.32%, versus 6.18% for the Public Works Board. While we call the PWB bond "bad and ugly," it was in fact beautiful for income-oriented investors and a screaming "buy." As we noted elsewhere, the taxable equivalent yield on the 25-year maturity exceeded 11% for top tax bracket investors. (A smaller portion of the PWB sale, Series J, yielded a bit less because of a slightly higher credit rating.)

The PWB sale also benefited from a market rally on Thursday that drove all tax-exempt yields lower. Muni yields declined this week, more so on shorter than longer maturities.

We thought the PWB issue might yield even more, but the size of the deal was slashed because of a legal fight tied to the governor's veto power. The legal battle is linked to the San Quentin state prison, and bond proceeds were supposed to help upgrade death row facilities there. However, the state took out the San Quentin portion at the last minute because of the legal question. In the end the "retail" buyers ordered about three-fifths of the downsized sale. The state still expects to sell the portion for San Quentin at a later date. The governor's vetoes this summer included striking language in a bill that would stop bond sales until certain San Quentin prison "overcrowding" issues were decided. A legal challenge is pending over whether the governor could veto so-called "policy" language.

The Los Angeles Department of Airports sold $310 million of senior revenue bonds rated Aa3 and AA. The 2014 maturity with a 4% coupon was priced to yield 2.41%. That is more than a half-percent higher that the same Calif. Water Resources maturity. The 10-year airport bond yielded 3.90%, with a choice of 4% or 5% coupons. The 15-year maturity yielded 4.50%, with a par coupon or 5.25% coupon. The 20-year airport bond yielded 5.00%, the 25-year, 5.25%, and the 30-year, 5.34%.

The L.A. Airport Department also sold about $379 million of subordinate revenue bonds yielding 2.58% in five years and 4.15% in 10 years. It also sold taxable Build America Bonds with a 10-year taxable 5.475% yield and a 30-year taxable 6.582% yield.

The Santa Paula Union High School District priced double-A-minus G.O. bonds this week. A five-year bond yielded 2.35% and a 10-year, 3.65%. The 25-year maturity yielded 4.65%, almost two full percentage points less than the PWB issue. Santa Cruz sold AA G.O. bonds with yields close to the high school district's sale.

California Muni Bond Market Nov. 9 to 13: Some Issuers Pay 5%+ on 10-year Bond

(Nov. 13) -- The good news? There are only so many more weeks when California state issuers can dominate the market in 2009. This week's $1.9 billion California State Communities Development Authority bond sale, backed by the state, was the big story after the four-year  debt yielded a tax-exempt 4%. Palomar Pomerado Health, a triple-B credit, provided a higher-yielding opportunity as well. In terms of general yield trends, tax-exempt rates didn't change very much during the holiday-shortened week (the municipal market closed for Veterans Day).

Next week the California State Public Works Board will sell about $1.3 billion of lease revenue bonds, no doubt at enticing yields. For a change a smaller portion, $250 million, will "disappear" as taxable Build America Bonds. The California Department of Water Resources will also sell about $170 million of water bonds that will be among the lower-yielding bonds in the market (thanks to high credit quality). The Los Angeles Department of Airports also will begin selling bonds for capital improvements, a deal we mentioned on October 23 in our Bond Updates page. The Los Angeles Department of Water and Power next week expects to price its first sale of taxable Build America Bonds. Yuk to that. The municipal utility also plans to sell tax-exempt bonds, maybe around $150 million. L.A, DWAP's water bond rating outlook was changed by Moody's to "positive" from "stable" ahead of the sale. Moody's rates the bonds Aa3. Quite a few smaller issues could price next week as well before the looming short Thanksgiving week stops new deals in their tracks. Our Upcoming Sales page is loaded with deals of $50 million and less.

This week's CSCDA deal of four-year bonds, rated on par with state general obligation debt, has ticked off some retail investors. We received a few calls complaining about the way the bond was offered to "retail" at 3% the first day, with the yield sweetened just a little on day two. Then came the final 4% offered on the day of the institutional pricing. That level would have lured plenty of other retail buyers if they had known (heck, 3.50% would have drawn in a ton of them). The lead underwriter was Goldman, Sachs & Co. for anyone keeping track.

Income-oriented investors with an appetite for triple-B health care bonds could turn to the Palomar Pomerado Health sale. A six-year maturity yielded 4.80% and a 10-year, 5.75%. The longest 30-year maturity yielded just a shade less than 7%.

A City of Richmond joint powers authority offered single-A lease revenue bonds that yielded 6% tax-exempt in 28 years. The five-year maturity yielded 3.80% and the 10-year bond, 5.00%. Those are sweet yields considering that Assured Guaranty also insured the bonds. (As we note, late on Nov. 12 the insurer also was downgraded by Moody's to Aa3 and remains under review.) The Richmond bond maturing Aug. 1, 2010, yielded 2.00%. There were four full percentage points of difference if you based a yield curve just on that deal, going from the shortest to longest maturity.

How do all these yields stack up to higher-quality issuers? A Santa Margarita - Dana Point Authority priced double-A revenue bonds this week (with ad valorem taxes providing the security). A five-year bond yielded 2.00% and a nine-year, 3.13%. Those yields are far below the CSCDA, Palomar Pomerado, and Richmond scales. The Santa Ana Unified School District sold A+ general obligation bonds with AGC insurance. The five-year bond yielded 2.30% and the 10-year, 3.45%. The 15-year maturity yielded 4.10%, barely higher than the four-year CSCDA bond backed by the State of California. The budget follies in Sacramento are hitting taxpayers in the pocket through exorbitant borrowing costs.

The Ontario - Montclair School District sold $23 million of A+ general obligation bonds this week but $19 million were structured as taxable Build America Bonds.

California Muni Bond Market Nov. 2 to 6: Mix of Issuers Pay for Single-A Ratings

(Nov. 6) -- In a week where tax-exempt yields rose by small amounts, new issues showed that some borrowers still pay up for being rated single-A or below. Maturities in the 10-year area would entice some investors because of tax-exempt yields around 4.5%.

Next week the California Statewide Communities Development Authority will sell about $1.5 billion of four-year bonds for local governments that were hit by a state property tax grab in a budget-balancing gimmick. The bonds carry the same rating as California's general obligation bonds. The two-day "retail" offering period will probably start today (Nov. 6) and continue on Monday.

In pricings this week, the California Educational Facilities Authority sold tax-exempt bonds on behalf of Pitzer College in Claremont. A five-year maturity yielded 2.95% and a 10-year, 4.53%. The 15-year bond yielded a shade under 5% and the longest 31-year maturity yielded 5.58%.

San Francisco's Airport Commission sold $486 million of revenue bonds carrying single-A ratings. An 11-year maturity yielded 4.46% and a 30-year bond, 5.50%. In contrast, California general obligation bonds yielded about 5.50% on a 25-year new issue this week. Puerto Rico, carrying the lowest investment-grade ratings on G.O. bonds, priced a 27-year maturity this week to yield a tax-exempt 5.875%.

In the double-A category, Pasadena sold electric revenue bonds that yielded 3.25% in nine years and 4.15% in 15 years.

The San Luis Obispo County Community College District sold $25 million of certificates of participation with an A+ rating. A five-year COP yielded 3.40% and a 10-year, 4.88%. A 13-year maturity yielded 5.18% and a 20-year, 5.64%. The 30-year COP reached 6.00%. Remember, lease deals such as COPs tend to yield more because the security is based on general fund appropriations rather than a G.O. pledge.

The West Valley-Mission Community College District sold lease revenue bonds (rated A1 and AA-) through a financing authority. They yielded 2.95% in five years and 4.48% in 10 years. Only $4 million were sold tax-exempt. About $53 million came as taxable Build America Bonds on 15- and 19-year maturities.

California Muni Bond Market Oct. 26 - 30: Yields Higher on Longer Maturities

(Oct. 30) -- Tax-exempt bond yields rose this week on longer maturities but didn't change as much for 10-year bonds and earlier. California's economic recovery bonds received the most attention this week (a $3.5 billion sale will do that).

Based on one spokesman's comments, California officials were downright giddy because the state was able to lower yields a bit at the final institutional pricing for the ERBs. (These are really "deficit" bonds that are refinancing certain older "deficit" bonds.) In reality the yields were awful high to begin with, considering that sales tax revenue and a back-up G.O.-type pledge secure the bonds. That is why so many smaller "retail" investors placed orders earlier in the week. A 10-year bond in the deal yielded 4.54% and a 13-year, 4.85%. The five-year maturity yielded 3.04%.

In contrast, the Santa Clara Unified School District sold double-A G.O. bonds this week with an AGC financial guarantee. A 12-year bond in that deal yielded 3.60%, or more than a full percentage point less than the state's 13-year maturity. That explains why so many investors flocked to the state sale.

Catholic Healthcare West was in the market the other day with hospital revenue bonds rated in the single-A category. The debt was issued by the California Health Facilities Financing Authority. A bond due in 2021 yielded 5%. A bigger chunk of the offering was sold on a variable-rate basis.

California plans to sell $1.5 billion of "regular" general obligation bonds next week. The San Francisco Airport Commission also will sell close to $600 million of bonds.

This weekly update is briefer than usual because we are working on the November print edition as well. We might add some more information as time permits.

California Muni Bond Market Oct. 19 - 23: Yields Steadier, State Deals Get the Ink

(Oct. 23) -- Tax-exempt bond yields didn't change all that much this week, following a couple weeks when a pullback by investors pushed rates higher. The state and its related issuers tend to get most of the ink since they are selling deals of size. Nevertheless, we should note from Upcoming Sales that there are plenty of other issuers in the market.

The $557 million tax-exempt portion of this week's California State Public Works Board sale included a 20-year maturity yielding 5.79% and a 21-year bond yielding 5.83%. (Note in a paragraph later in this weekly wrap-up that a local water district only paid 4.85% on a 30-year tax-exempt bond.) A quarter-billion dollars of PWB bonds came as taxable Build America Bonds and the 25-year maturity yielded a taxable 8.361%. Since federal taxpayers get to subsidize 35% of the interest costs in these so-called "stimulus" transactions (or "unneeded giveaways of taxpayer money as we call them), the actual borrowing cost to PWB is 5.43%.

The Public Works Board definitely paid a hefty yield for the taxable borrowing compared with other recent municipal taxable borrowers. Even so, a married couple filing jointly with $100,000 of net income still would come out ahead on an after-tax basis buying the 20-year tax-exempt bond instead of the 25-year taxable maturity. And it's a slam-dunk for those in much higher income categories to go with the tax-exempt bonds. We didn't get a chance for the $100,000 taxpayer example to work through the tricky question of what happens if the state paid up for an optional redemption of the taxable bonds before their maturity. (Tax-exempt bonds in general are callable after 10 years.) Still, we don't know many smaller tax-exempt buyers who like taxable BABs, period.

California's $3 billion sale of economic recovery bonds will get attention next week. This is a refunding of several earlier maturities to level out debt service. Holders of the debt that gets refunded will see the ratings rise to triple-A thanks to the escrow structure. These "deficit" bonds, thanks to double-barreled security, are higher rated than state G.O. debt and should pay less of a borrowing penalty. The Bay Area Toll Authority also has a big bond sale pending but that deal will involve taxable BABs.

In the tax-exempt market this week the San Francisco Airport Commission priced revenue bonds in the single-A rating category. The five-year bond with FSA insurance backing yielded 2.70% and the 10-year with FSA backing yielded 4.05%. A 15-year bond with no financial guarantee yielded 4.61%. Contrast that sale with a double-A pricing of Olivenhain Municipal Water District water revenue bonds. The five-year yielded 2.10% and the 10-year, 3.40%. You had to go out to 15 years to get 4.00%, and the 30-year yielded 4.85%. Credit spreads may have narrowed but there is still some pick-up to be had on single-A debt (even if it carries an added financial guarantee).

Single-A Los Angeles Community Redevelopment Agency tax allocation bonds priced this week yielded 3.30% in five years, 4.7% in 10 years, and above 5% on maturities 15 years and beyond.

A Riverside school district Mello-Roos bond sale that was unrated yielded 6% in 10 years this week. Sophisticated investors who can do the research and be contrarians in this housing market end up raking in a lot of yield on unrated deals, but you better understand the risks.

California Muni Bond Market Oct. 12 - 16: Yields Keep Rising from Insane Lows

(Oct. 16) -- Municipal bond prices gave up more ground this week as yields continued to rise from their recent bottom-of-the-basement levels. Although plenty of general media stories are talking about a "weakening" municipal bond market, in reality yields are simply rising from lows that were utterly nuts. For several weeks yields kept plummeting for various supply-and-demand factor reasons we have discussed here several times. Now investors are finally rebelling a bit. Toward the end of the week we heard there was some buying interest, even though yields still aren't anything to write home about. Some issuers also postponed deals; that helped the new-issue market avoid further testing at current levels.

This was a holiday-shortened week because of Columbus Day. Our weekly wrap-up is going to be short as well. In general terms tax-exempt yields rose by roughly a quarter-point this week, at least on longer maturities. As usual, however, the trend varies depending on maturity, credit quality of bond, etc. But there is no question yields rose, and we should add that rates on other fixed-income securities, including the 30-year Treasury bond, also were higher.

Earlier in the week the Rowland Unified School District priced $141 million of general obligation bonds. Moody's rates the bonds A1 and Standard & Poor's AA- after a recent one-notch upgrade. S&P commended the Rowland district for building and maintaining good reserve levels. The Rowland school five-year bond yielded 2.38% and the 10-year, 3.61%. The 13-year bond yielded 3.83%. The biggest chunk of the deal was sold as capital appreciation debt, with a 30-year zero-coupon bond yielding 6.75%. The Rowland district also sold $12 million of taxable Build America Bonds.

The Carlsbad Unified School District sold $51 million certificates of participation with a financial guarantee from Assured Guaranty Corp. A COP due in five years yielded 2.71% and a 10-year maturity, 4.02%. A 32-year maturity yielded 5.18%. The Colton Joint Unified School District priced $50 million of G.O. bonds with AGC bond insurance. An 11-year maturity yielded 4.20% and a 25-year bond, 5.16%. It also sold zero-coupon bonds yielding 3.56% in 2014 and 5.15% in 2019.

California Muni Bond Market Oct. 5 to Oct. 9: Investors Finally Balk at Low Yields

(Oct. 9) -- Apparently even tax-exempt bond investors can take just so much. General yields in the municipal bond market finally rose a little this week as investors developed indigestion and drew a line in the sand, at least temporarily. Just remember, tax-exempt yields on higher-grade issues are still hovering around lows last seen in the 1960s, so one week of higher yields isn't cause for much celebration. We wouldn't touch some higher-quality deals at these yield levels.

Indeed, some investors even balked at buying California's $1.3 billion tax-exempt general obligation offering this week. The "retail" crowd ordered about one-third of the sale, not too shabby but a sign interest has dropped after the state's yield "penalty" shrunk relative to higher-rated munis. And bigger institutional investors, seizing on the general market's weakness, forced California to boost its "preliminary" rates by roughly a quarter-point on longer maturities to draw buyers. (The state also cut the size of the taxable G.O. portion after it was clear buyers are drawing back from current yield levels.)

A tax-exempt California G.O. bond due in 20 years yielded 5%. The week before the higher-rated East Bay Regional Park District sold a 20-year G.O. bond at 3.59%. A double-A school district this week priced a 20-year G.O. at 4.15%. And, as we noted recently, the Virgin Islands "rum" bond yielded 4.75% in 20 years. So California still has to pay up, just not as much as some would prefer. (Remember, California is the market's new laughingstock, as our little item about Louisiana's upgrade explains.)

We recently noted that conservative investors looking for more yield might consider a $535 million healthcare bond from Cedars-Sinai Medical Center, a prominent Los Angeles institution. The tax-exempt bonds are rated A2 by Moody's and A+ by Fitch. The 20-year bond with a 4.625% coupon was priced to yield 4.73% this week. The 30-year maturity yielded 5.05%. At the shorter end, a five-year maturity yielded 2.87%, a 10-year, 3.92%, and a 15-year, 4.35%. (The California Health Facilities Financing Authority was the issuer.)

Those yields are still nothing to write home about perhaps, but you give up a lot of yield to buy other higher-rated munis. For example, the Whittier Utility Authority sold water revenue bonds this week (AA+). A five-year bond yielded 1.85%, a full percentage point less than the Cedars-Sinai deal. The 10-year yielded 3.02% and the 15-year, 3.85%. Other examples of recent sales and yields are in the table below.

The longer maturities on the Whittier deal were sold as taxable Build America Bonds, fitting a pattern we explained recently. Issuers can save the most by selling shorter- and intermediate-maturities as tax-exempt, with longer maturities taxable.

California Muni Bond Market Sept. 28 to Oct. 2: Some Tax-exempt Yields Plunge

(Oct. 2) -- In a recent item (here), we said this about the then-upcoming East Bay Regional Park District general obligation bond sale: "Safety-oriented investors might like the credit ratings but they won't like the yields." Well, the yields on that sale got a lot uglier (meaning lower) than even we had hoped. That pretty much summarizes the latest week in California's tax-exempt bond market. Tax-exempt yields keep dropping as taxable Build America Bonds drain supply and tax-exempt bond funds keep having to put record inflows to work. The Bond Advisor a year ago said it was a great time to buy muni bonds and we have been vindicated. See our October print edition for some of our latest thoughts on the current market. (If you don't subscribe, it's a great time to start. Or buy a gift subscription for your children, friends, etc.)

Our October print edition also discusses next week's State of California general obligation bond sale. We have nothing to add here except to note that taxable BABs will take away more supply from the tax-exempt market.

As for the $88 million East Bay Regional Park District deal (rated AAA by S&P and A1 by Moody's), a five-year bond yielded 1.44% and a 10-year, 2.50%. That is much lower than we would have expected even a week ago. The 15-year maturity yielded 3.18% and the 20-year, 3.59%. The Pasadena Area Community College District this week also sold highly-rated G.O. bonds (Aa3 and AA+). The deal yielded 1.79% in five years, 2.90% in 10 years, and 3.45% on a 15-year bond. The college sold about half the $52 million issue as taxable BABs.

We should note that the coupons on the Pasadena and East Bay Park district were structured to make these "premium" or so-called "cushion" bonds. While that provides some protection against rising rates, it doesn't overcome our resistance to those paltry yields no matter how safe the bond.

San Diego County sold certificates of participation this week. As the chart below shows, it paid a little more for the "COP" structure. However, the deal was rated double-A so the yields still weren't anything to write home about (unless you really dig 2% in five years).

California Municipal Bond Market Trends Sept. 21 to Sept. 25: Rates Drop (Again)

(Sept. 25) -- Last week we said this: "Yields on municipal bonds keep declining as much-needed tax-exempt bond supply continues to be siphoned off by taxable Build America Bonds ... In addition, cash keeps pouring into municipal bond funds and that money has to be put to work somewhere." This week we say the same thing. Here is a classic example. The El Monte City School District priced $28 million of general obligation bonds and more than $18 million were issued as taxable BABs. Everybody is jumping on the bandwagon. In coming days the Colton Joint Unified School District plans to sell G.O. bonds, with $18.8 million tax-exempt and $28.2 million as taxable Build America Bonds.

By the way, if all those recent taxable deals make the traditional tax-exempt investor sick, don't read this about a big school district selling more than $1 billion of taxable bonds.

As for the tax-exempt portion of the El Monte school deal, a five-year bond yielded 1.98%. The 10-year maturity yielded 3.40% and the 15-year, 4.01%. The bonds are rated A2 and A+ and also included insurance from Assured Guaranty. The Victor Valley Union High School District sold G.O. debt, mainly as capital appreciation bonds. A current-interest bond due in 2034 yielded 4.55% (rated A2 and AA-minus and with AGC insurance). The Semitropic Water Storage District priced $52 million of revenue bonds (rated AA-minus) the other day with a top yield of 4.54% on a 2038 maturity.

In the deal that got all the attention this week, California's $8.8 billion revenue anticipation note sale yielded 1.5% on a June 2010 maturity. Why did so many buyers like that yield? Well, several smaller school districts priced one-year notes this week (due in October 2010) and they only yielded 0.48%. So the state had to pay three times as much, both because of the size of the deal and as a penalty for California's chronic financial mismanagement.

California Municipal Bond Market Trends Sept. 14 to Sept. 18: Yields Still Falling

(Sept. 18) -- Yields on municipal bonds keep declining as much-needed tax-exempt bond supply continues to be siphoned off by taxable Build America Bonds (an unneeded giveaway of federal "stimulus" funds). In addition, cash keeps pouring into municipal bond funds and that money has to be put to work somewhere.

"Generic" scales of tax-exempt yields are reaching record lows, though some of these "generic" rates have only been calculated in the last three decades or so. Nevertheless, it shows how tough it is to get decent yields on higher-rated deals right now. Both 10-year and 20-year yields are near or at all-time lows based on these modern "generic" scales. In addition, an 11-bond index of general obligation issues tracked by one industry newspaper just touched it lowest level since 1967, or when LBJ was President.

You can still find a 4% yield on a 10-year muni bond. The trade-off? Lower ratings and/or a form of security that is slightly weaker, such as lease-related certificates of participation (COPs). The Val Verde Unified School District priced $44 million of COPs the other day and the 10-year maturity carried a 4% coupon and yielded 4.12%. The five-year COP with a 3% coupon was priced to yield 2.71%. A 20-year maturity was priced at par to yield 5%. As an added bonus, the COPs are guaranteed by Assured Guaranty, one of the few viable bond insurers still doing new business. Without the guarantee they were rated A-minus.

Next week's calendar includes the massive California revenue anticipation note sale. Most income-oriented investors will pass unless they need to park cash for a few months.

California Municipal Bond Market Trends Sept. 7 to Sept. 11; Rates Drop a Bit

(Sept. 11) -- Yields on municipal bonds dropped slightly in recent, though activity also was off a bit because of the holiday-shortened week. The biggest trend to report remains a fall-off in tax-exempt supply, even as demand remains steady or grows.

Taxable Build America Bonds, the unneeded giveaway of federal funds under the "stimulus" program, keep spreading faster than the swine flu. We noticed the other day that San Francisco is lining up more certificate of participation sales and part of the transaction will sell as taxable BABs.

If you wonder where some of the tax-exempt supply is going, just consider this little list of recent taxable Build America Bond issuers in the U.S. The Sedgwick County Unified School District No. 265 in Kansas sold $50 million taxable GOs. West Fargo in North Dakota sold almost $8 million taxable water and sewer revenue bonds. The University of Texas System Board of Regents sold $250 million taxable. Galveston County in Texas sold $75 million taxable. The Jordan Valley Water Conservation District in Utah sold more than $20 million taxable. These are all "traditional" tax-exempt issuers that are jumping on the federal giveaway bandwagon. And people wonder why tax-exempt yields are so low again. Well, take away tax-exempt supply by the tens of millions and hundreds of millions and billions of dollars and you get a distorted market.

This week Puerto Rico offered certain general obligation bonds at a fixed rate to avoid higher variable-rate costs. The offering was under $100 million. A bond due in 2030 with a 5.25% coupon yielded 4.93% and a bond due in 2031 with a 5% coupon was priced at par. Financial Security Assurance backs the bonds. Puerto Rico munis are state and federal tax-exempt for investors in all 50 states. This small of an offering wasn't as much of a test on yields from an issuer that is rated at the bottom of the investment-grade scale.

California Municipal Bond Market Trends Aug. 24-28; M-S-R Energy Sells $901 Mln

(Aug. 28) -- Yields in the municipal bond market didn't change much this week. In general, they dropped a little on longer-maturity bonds and rose a little on the shortest-maturity bonds. The market will slow down later next week ahead of the Labor Day weekend.

The M-S-R Energy Authority priced $901 million of prepaid gas revenue bonds. S&P rated the deal "A" and Fitch Ratings, "A+." A bond due in 20 years yielded 6.375%. A 25-year bond yielded 6.68%. A 30-year maturity yielded 6.705%. This type of bond is somewhat complex because it depends on various parties for security. We aren't so sure "retail" investors played much of a role.

The Peralta Community College District sold $100 million of general obligation bonds (S&P:AA-). The five-year maturity yielded 2.25%, the 10-year, 3.57%. In 15 years, 4.30%; in 20 years, 4.79%, and a 30-year bond, 5.14%.

In contrast, the Davis Public Facilities Financing Authority sold about $10 million local agency refunding revenue bonds secured by various Mello-Roos districts. S&P rated the bonds single-A and the deal was insured by AGC. Even so, a five-year bond yielded 3.26%, or a full percentage point more than the Peralta CCD sale. The Davis deal yielded 3.91% in 10 years, 4.58% in 15 years, and 5.10% in 20 years.

California Municipal Bond Market Trends: Aug. 17-21; M-S-R Energy to Sell $1 Bln

(Aug. 21) -- As we note on our home page, taxable Build America Bonds continue to sap supply from California's tax-exempt market. That is one reason tax-exempt yields keep dropping, and one index of longer-term muni rates just reached its lowest level since May. Combine decent demand for tax-exempt bonds with less supply and you end up with lower yields.

Even so, investors willing to get past "headline risk" can find some decent yield premiums. Recently, for example, redevelopment agencies in the state got some bad press after the state decided to take some of their money to balance its own budget. We discussed this at more length in the first-part of our August print edition. In addition, a sour economy and declining property values tend to penalize all redevelopment issuers, even though default remains a remote risk for almost all of them. This week, San Francisco's redevelopment agency sold tax allocation bonds (Mission Bay) that yielded 4.84% in five years. The University of California Regents, with double-A ratings, sold a five-year bond yielding 2.06%. Now that is one heck of a yield premium on the redevelopment bond.

The chart below shows yields on some other selected sales in California's municipal bond market. It is also interesting to compare the Indian Wells Valley Water District yields with the University of California deal.

Next week the M-S-R Energy Authority plans to sell $1 billion of prepaid gas revenue bonds. We will discuss this offering in an upcoming post.

(The Bond Advisor is providing, by early Friday each week, a short summary of recent trends in California's municipal bond market. Individual investors often want to get a quick sense of recent yield trends. In addition, we highlight the yields on a few recent new issues. Just remember that each deal is different and various factors and structuring decisions influence the yields, even among bonds with similar credit characteristics. We rely on underwriters, brokers, and other market participants to provide accurate information about new issue yields, coupons, etc.)

Review of California Municipal Bond Market Trends from August 10 to August 14

(Aug. 14) -- Tax-exempt rates didn't change very much in recent days as the market settled into a narrower trading range. The rally in California's general obligation bonds slowed down markedly in recent days, though yields on shorter maturities still dropped a little bit. After passage of the recent budget yields dropped a full percentage point in the secondary market on shorter maturities, such as the California five-year bond.

Our first part of two print editions in August discussed California's budget and its implications for bonds throughout the state. We also discussed the problem with taxable Build America Bonds and the way they are distorting the tax-exempt market. The University of California Regents plan to sell more than $1 billion of bonds the week of August 17th but most of them will be taxable BABs.

The table below shows examples of some recent yields on new-issue sales. The West Contra Costa Unified School District sold single-A bonds that were insured by Assured Guaranty. A five-year bond with a 4% coupon was priced to yield a tax-exempt 2.89%. A bond maturing in 2019 yielded 4.23%. A 15-year maturity yielded 4.91%. The 20-year bond yielded 5.33%.

Note the contrast between that sale and the Bay Area Toll Authority toll-bridge bonds with a double-A rating and no insurance. For example, the toll revenue bonds yielded 3.60% in 10 years and 4.26% in 15 years. Issuers with double-A ratings or better are still being rewarded with lower yields in the current market due to widened credit spreads. The table below also demonstrates other ways to pick up yields by looking at solid investment-grade redevelopment and health system bonds.