Municipal Bonds Little Changed at Week's End

Municipal bonds were little changed and lightly traded Friday, with the exception being a flurry of morning activity in high-grade, short-maturity bonds.

Only two issuers sold bonds to retail investors:

-- $200 million future tax secured bonds for the New York City Transitional Finance Authority in two series; Aa1/AAA/AA+; retail only.

-- $155 million general revenue bonds for the Boston Water and Sewer Commission in two series; Aa2/AA+/AA; retail only.

In terms of day-to-day total returns:

-- The high-grade, short end of the curve showed a total return of positive 0.001%, according to Municipal Market Advisors data.

-- The high-grade, intermediate part of the curve showed a total return of 0.00%.

-- The high-grade, long end of the curve showed a total return of positive 0.01%.

The high-grade marketplace of bonds rated double-A or better saw limited secondary activity. Supply will continue to be significant in the next two weeks, and many believe yields will continue to rise (and prices decline) as a result.

Early in the day, markets were made on high-grade bonds maturing in the 5-year range, as well as pre-refunded bonds. It appears these accounts were selling the short bonds with the intention of buying longer-maturity securities, a trend of the past five or six trading sessions.

In the non-investment grade sector of non-rated bonds or triple-B and lower, activity was muted. However, a few multimillion-dollar block trades of long maturity bonds issued by Main Street Natural Gas Inc. took place.