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Municipals end weaker as Treasuries sink after retail sales data; Massachusetts leads issues
By Sheri Kasprzak
New York, Sept. 12 – Municipals cheapened Friday following diving Treasuries on the release of positive U.S. retail sales data, market sources said.
Yields were seen 2 to 4 basis points higher, especially outside of 20 years, said a trader during the afternoon. Municipals weakened but outperformed Treasuries.
After U.S. retail sales data reportedly climbed by 0.6% for August, the 30-year Treasury bond yield rose by 8 bps to close at 3.35% Friday, the 10-year note yield also rose 8 bps to end at 2.62%, and the five-year note yield climbed 4 bps to 1.83%.
Demand for municipals remains strong. According to the latest data from Lipper, inflows into municipal mutual funds totaled $470 million for the week ended Sept. 10.
Looking to the new-issue action for the week ahead, about $6 billion of offerings are scheduled to price.
Massachusetts deal set
Among the larger offerings coming in the week ahead, Massachusetts is set to sell $350 million of series 2014E consolidated loan green general obligation bonds through senior managers Morgan Stanley & Co. LLC, BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.
The bonds are due 2019 to 2031, and proceeds will be used to finance approved capital projects within the commonwealth.
Refunding bonds ahead
The commonwealth is also planning to sell $329.6 million of G.O. refunding bonds using the same senior managers.
Those bonds are due 2019 to 2025.
Proceeds from that deal will be used to refund the commonwealth’s series 2007C, 2008A and 2009A G.O. bonds.
A pricing date for this deal has not been set.
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