U.S. states and municipal sales scheduled debt approached the highest since 2005

U.S. states and municipal sales scheduled debt approached the highest since 2005 this week as issuers seek to use the federal subsidy Build America Bond program before the end of the year-end potential.

The index 30-day visible supply of new municipal issues reached 26.3 billion U.S. dollars on 16 November, the highest since February 2005. The index fell to 17.6 billion U.S. dollars today.

Of the $ 11,300,000,000 debt of states and local governments are offering this week, about 4.2 billion U.S. dollars are taxable Americas Building, the third most-since August 2009 . With these programs with federal support, which expires December 31 unless lawmakers agree to an extension, supply may increase, said Justin Hoogendoorn, bond strategist at BMO Capital Markets in Chicago.

"It's not a normal year-end," he said. "Not every incentive to come in and get funding."

From November 1, taxable values have made about 35 percent of total municipal issuance, compared with about 23 percent a week since the program began in April 2009.

Thirty years of tax-exempt sale until Oct. 25 through Nov. 18 when California said the sale of $ 10 billion in notes with yields gained about 77 basis points, or 0.77 percentage points .
'Supply of cash "

December will not be the same type of increase in performance, even with a jump of supply for bonds due Dec. 1 will provide investors with cash to make purchases, said Matt Dalton, chief executive of Belle Haven Investments Inc. in White Plains, New York, which has $ 450 million in municipal property.

"The maturity have created a source of healthy cash at the end of the year to absorb a lot of maturity," said Dalton.

The 10-year yields fell tax exempt under one basis point as of yesterday as yields of 10-year Treasury rose above 3 percent for the first time since July.

The extra yield investors demand to build the Americas over Treasuries to 30 years was 195 basis points yesterday, down a basis point from a maximum of three months on 30 November, according to Wells Fargo index.

Building Americas

A bill pending in the Senate would extend the Build America Bonds program through 2011, while cutting the subsidy to 32 percent of the cost of the interests of 35 percent. Almost 173 billion U.S. dollars of debt liabilities has been sold since the program began in April 2009 as part of the economic stimulus package.

If emissions increase, the total of 2,011 municipalities would be about 395 billion, compared with $ 345 000 000 000 if the program ends, Alex Roever and Chris Holmes, strategists at JPMorgan Chase & Co., said in a note Research on 24 November.

The bill would reduce the advantage of emitting Americas construct rather than tax-exempt securities of the subsidy reduction of 3 percentage points, analysts said.

"A reduction of subsidies of this magnitude, holding other factors constant, would be only a modest reduction in the volume of BAB emission current levels," they said.