Municipal bond prices ended unchanged yesterday amid fairly heavy volume of bonds out for bid.
One trader estimated that there was $300 million to $400 million of bonds out for bid, which is more than usual for this time of year. He added, though, that none of the bid lists were particularly large.
While the bid for Street bonds was fading, players were still paying "fairly decent numbers" for customers' bonds, the trader also said. "The Street bid side is fading a little bit because I think people don't want to own bonds through the holidays."
Dealers are looking at a roughly two-week period during which they will probably see little if any institutional business because those investors have closed their books for the year, he said.
"Maybe you'll have some retail business, but no institutional business, so I think a lot of people are selling what they can now so that they don't own it for another two weeks," he said.
The trader said bid wanteds were taking center stage yesterday because the market has no competitive or negotiated deals to focus on.
"This is the only game going on right now," he said.
A municipal analyst said both high-grade yields and dollar bond prices were unchanged in light activity yesterday.
"People are pulling back their bids slightly," he said, adding that they were trying to avoid loading up on inventory they don't want.
In debt futures, the March municipal contract was up 1/4 point to settle at 84 30/32. Yesterday's March MOB spread was negative 473, compared to negative 474 on Tuesday. In the government market, the 30-year bond was up 1/8 point to yield 7.83%.
As for yesterday's bid-wanted activity, a second trader concurred that it was heavier than usual for this time of year, but said he was hard pressed to find a reason why.
"It may just be year-end tax selling, it could be redemptions, it could be a lot of things," he said. "You name them, they had it out today -- the bond funds were pretty good sellers."
While the muni contract was up yesterday, cash prices probably were down somewhat "just because of the sheer weight" of inventory, the trader said.
"I can honestly say I have no feel of the market right now," he said. "Every day you see the Blue List total go up without any new issuance."
The trader said judging market levels was difficult.
"It's so hard to peg it, like PICA's, they're off 1/8 on the bid-side," he said, while "some things in New York are down a basis point or two." PICA stands for Pennsylvania Intergovernmental Cooperation Authority.
The trader said he suspected that most firms that are on a calendar year want to stay light for year end, "and just by that you lose liquidity somewhat."
"I think most guys are really heading out for the holidays, and that's causing a lot of it," the trader said.
A third trader yesterday said he's staying away from discount bonds. because people are going to be wanting current coupon bonds next month.
"We've had a great [tax] swap season, and we don't want to get stuck with that type of stuff on the shelf come January," he said. "You don't want to be the last one selling that stuff because you are going to get hammered."
The 30-day visible supply of municipal bonds yesterday totaled $862 million, down $480.3 million from Tuesday. The total marks a new low for 1994.
It comprises $312.9 million of competitive bonds, down $170.4 million Tuesday, and $549.5 million of negotiated bonds, down $309.9 million. The competitive total is also a new low for 1994.
Standard & Poor's Corp.'s Blue List of Municipal Bonds was up $81.8 million yesterday, to $1.905 billion.
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