Municipals close unchanged to firmer out long; only $100 million of new offerings expected

By Sheri Kasprzak

New York, Dec. 20 - Municipals rounded out the day mostly flat to slightly firmer in longer maturities, market sources said. With very light primary action and a quiet secondary market, municipals did get a slight boost from an improved Treasuries market.

Yield around 30 years were better by about 2 basis points.

The 30-year Treasury yield dropped by 8.5 bps to close out the session at 3.823%. Meanwhile, the 10-year note yield fell by 4.5 bps to close at 2.886%, but the five-year note yield rose by 3.5 bps to 1.685%.

On Thursday, municipals had experienced some weakness, and Alan Schankel, managing director with Janney Montgomery Scott LLC, said mutual fund selling was a factor.

"Lipper reported that municipal mutual funds experienced $1.7 billion in outflows this week, the 30th week of negative flows."

Looking to the very light new-issue calendar for the week ahead, market sources report that less than $100 million of new offerings will price as the market prepares to close out 2013.

Two deals for Northeastern

In the coming year, there will be two offerings sold for the benefit of Massachusetts's Northeastern University.

The university itself plans to price $100 million of series 2014B taxable bonds (A2).

The Massachusetts Development Finance Agency plans to sell $150 million of series 2014A revenue bonds for the university, said a preliminary official statement.

Both of these bonds will be sold on a negotiated basis through Barclays and Morgan Stanley & Co. LLC.

Proceeds from both the deals will be used to construct, design and equip a new interdisciplinary science and engineering building and to renovate existing administrative and office space.

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