Municipals end week firmer with Treasuries ahead of a small calendar; Connecticut deal ahead

By Sheri Kasprzak

New York, Oct. 25 - Municipal yields were lower on Friday following along with stronger Treasuries, market sources said. The market awaits a smaller-than-usual calendar.

Tax-free munis had a strong week and Friday was no exception. With little primary activity to push the market and new issues still being absorbed, there was little strain on the market, said one trader.

Yields were down 1 to 2 basis points on the day.

During the session, the 10-year Treasury note fell by 2 bps to end the session at 2.506% and the 30-year bond yield fell by 2 bps at 3.596%. The five-year note yield fell by 2.8 bps at 1.281%.

"It has been a very strong week for tax-free bonds, with Thursday's performance particularly notable, outperforming Treasuries and moving municipal-to-Treasury ratios lower," said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The upcoming new-issue calendar is light for the week ahead with about $5 billion in new offerings coming up.

Connecticut highway debt set

Looking to the top offerings for the week ahead, the State of Connecticut plans to come to market with $600 million of series 2013A special tax obligation transportation infrastructure bonds.

The bonds will be offered through Siebert Brandford Shank & Co. LLC.

The bonds are due 2014 to 2033.

Proceeds will be used to finance the construction and improvement of highways and roadways within the state.

D.C. notes planned

Coming up on Tuesday, the District of Columbia will hit the competitive market with $405 million of series 2014 general obligation tax anticipation revenue notes (MIG 1/SP-1+/F1+).

The notes are due Sept. 30, 2014 and proceeds from the sale will be used to finance general governmental expenses for the city ahead of the collection of revenues in the 2014 fiscal year.

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