Munis seen unchanged to slightly weaker; Illinois sells $1 billion with 1.395%-6.63% yields

By Sheri Kasprzak

New York, Jan. 28 - Municipals were once again seen mostly unchanged to slightly weaker on Thursday, with most of the weakness seen on the long end of the yield curve. On the primary side, market insiders focused their attention on a $1 billion sale from the State of Illinois.

"The long end has really taken a beating all week long," noted one trader when asked about the trend of weakness out long during the course of the week.

"It's hard to say what's pushing yields up out there, but the rest of the curve has been unchanged."

Amid light trading action, Puerto Rico Sales Tax Financing Corp.'s series 2010A subordinate bonds were seen in demand. The 5.5% 2037 bonds were trading at 5.454% Thursday, and the 5% 2040s were seen at 5.04%.

The bonds recently priced by St. Cloud, Minn., for CentraCare Health System were moving. The 5.125% 2030 bonds were trading at 4.898%.

Meanwhile, all eyes were on Illinois' $1 billion offering of series 2010-1 taxable general obligation Build America Bonds on Thursday.

The bonds (A2/A+/A) were sold through Barclays Capital Inc.

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