Municipals finish mostly unchanged ahead of $10 billion calendar; 30-day supply at $13 billion

By Sheri Kasprzak

New York, Dec. 6 - Municipals were mostly unmoved to close out the week with little supply and little secondary activity to move the market, said insiders.

Yields were flat to a touch better on the session, boosted somewhat by a stronger Treasuries market. Treasuries were improved for the most part by nonfarm payrolls data released by the Bureau of Labor Statistics.

Meanwhile, the market is awaiting what appears to be the last large rush of offerings in the coming week with new-issue supply seen at about $10 billion, thanks to a couple of $1 billion-plus offerings. The 30-day visible supply is at about $13 billion.

Foothill, thruway bonds ahead

Looking to the largest offerings of the week, the delayed $2,259,586,376.20 offering of series 2013 toll road revenue refunding bonds from the Foothill/Eastern Transportation Corridor District of California will price during the week ahead.

Barclays and Goldman Sachs & Co. are the senior managers for the seven-tranche offering.

The bonds (Baa1/BBB-/BBB-) will be used to refund the agency's series 1999 revenue bonds.

Another major deal for the week comes from the New York State Thruway Authority, which is poised to price $1,589,000,000 of series 2013A general revenue junior indebtedness obligations (A3/A-/).

The bonds will be sold through lead managers Citigroup Global Markets Inc. and Loop Capital Markets LLC.

The bonds are due May 1, 2019.

Proceeds will be used to fund the construction of improvements to the Tappan Zee Bridge.

Puerto Rico index down 22%

Moving to data, the S&P Municipal Bond Puerto Rico index has fallen by 22% over the past year as yields have spiked upward, said a report released Friday by S&P Dow Jones Indices.

The weighted-average price of the bonds in the index has fallen by 3.2% during the quarter as the average yield has risen 28 basis points to more than 7%. For the year to date, the index is down 17.36%.

Elsewhere, investment-grade tax-free bonds are underperforming their corporate counterparts, S&P Dow Jones Indices said. The S&P National AMT-Free Municipal Bond index is down 3.31% for the year to date. Investment-grade corporates, as tracked by the S&P U.S. Issued Investment-Grade Corporate Bond index, are down 1.98% for the year to date.

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