Muni 30-day visible supply at $2.9 billion; New York Transportation Development yields lowered

By Sheri Kasprzak

New York, Dec. 21 – Municipals were unchanged to a touch better on Monday as the market ground to a halt ahead of Christmas, market sources said.

Yields on top-rated munis were seen flat to 1 bp lower, said traders.

Meanwhile, Treasuries were narrowly mixed. The 30-year bond yield rose by 2 basis points to 2.92% after West Texas Intermediate crude oil rose by a penny to $34.74 a barrel. The 10-year benchmark note yield climbed by 1 bp to 2.20%, the five-year note held steady at 1.67%, and the two-year note yield edged lower by 1 bp to 0.96%.

Only $2.9 billion ahead

There’s virtually no new-issue supply in the week ahead of Christmas, and the 30-day visible supply sits at just $2.9 billion, said Tony Rodriguez and John V. Miller, co-heads of fixed income with Nuveen Investments, in a note Monday.

Rodriguez and Miller said they believe volume will pick up after the New Year.

“Additionally, the outsized Jan. 1 coupon money is yet to be invested,” the two noted.

“This supply/demand dynamic, along with continued equity volatility, should support the municipal market.”

New York Transportation yields lowered

Moving to recently priced offerings, the New York Transportation Development Corp.’s $167.26 million revenue refunding bonds have seen yields lowered substantially, market sources reported.

Yields on some maturities were dropped by 25 bps.

The bonds (Baa1) were priced Dec. 15 through Citigroup Global Markets Inc. and Ramirez & Co. Inc.

The bonds are due 2017 to 2023 with 5% coupons and yields from 0.95% to 2.35%.

Proceeds will be used to refund existing debt issued for a loan to Terminal One Group.

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