Muni yields close firmer; primary market sees some action; Massachusetts offers $400 million

By Sheri Kasprzak

New York, Dec. 20 - Municipals closed out the session firmer after the week's few offerings priced on Tuesday, said market insiders.

"Given the fact that there's a very slim calendar, there was a lot of activity," said one trader.

"Overall for the week, there's not much, but it really seemed like everything priced all at once."

Long bonds were the most improved. Both 30-year and 20-year yields were seen down by almost 3 basis points. Seven-year yields were down 2 bps.

Craig Elder, senior vice president of fixed income with Robert W. Baird & Co., said Tuesday that last week was a strong one as investors faced the challenge of excess reinvestment cash from December and January coupon payments and maturing debt. This week, Elder said, investors will have just $909 million of new issuance to tempt them.

"After experiencing huge inflows of money into municipal bond mutual funds the week ended Dec. 7, the most since March 2010, investors placed around $460 million into muni bond funds for the week ending Dec. 14," Elder wrote in a report.

"In the week ending Dec. 7, there were inflows of almost $1.4 billion. High-yield municipal bond funds saw a second consecutive week of inflows this past week after two straight weeks of outflows. Funds that report weekly saw inflows of $90.5 million. The previous week, high-yield funds reported inflows of $56.5 million."

Secondary sees action

One trader said secondary was still experiencing plenty of interest. Among the bonds seen trading Tuesday, Suffolk County, N.Y.'s recently priced series 2011B G.O. refunding bonds were circulating. The 2.5% 2021 bonds were moving at 2.4% on Tuesday afternoon. The bonds priced Dec. 15 at 98.972.

Massachusetts offers G.O. debt

Leading Tuesday's fairly active primary activity, the Commonwealth of Massachusetts sold $400 million of series 2011E consolidated loan general obligation bonds, said a pricing sheet. The offering was one of several pricing during the session as the market prepared for a long winter's nap during the Hanukkah and Christmas holidays.

The bonds (Aa1//AA+) were sold competitively with J.P. Morgan Securities LLC winning the bid.

The bonds are due 2015 to 2018 and 2021 to 2027 with 3% to 5% coupons.

Proceeds will be used to finance a portion of the commonwealth's capital plans.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.