December 5, 2017 / 9:18 PM / 11 days ago

UPDATE 1-U.S. muni bond yields fall for fourth straight session

(Adds analyst quote, background on issuance)

Dec 5 (Reuters) - U.S. municipal bond prices rose for a fourth straight session on Tuesday as investors began snapping up the week’s huge influx of supply, dropping yields as much as 8 basis points on Municipal Market Data’s benchmark scale.

The yield on top-rated bonds due in 10 years fell 6 basis points to 1.99 percent and the 30-year yield tumbled 8 basis points to 2.58 percent, according to MMD, a unit of Thomson Reuters.

“Strong reception to primary supply encouraged very strong secondary trading as muni participants look ahead to drop in 2018 issuance and January re-investment needs,” said Greg Saulnier, a MMD analyst.

The market is being bombarded this week with more than $20 billion of debt sold by states, cities, hospitals and other issuers ahead of federal tax changes pending in U.S. Congress that could eliminate tax exemption for private activity and advance refunding bonds starting in 2018.

The year-end supply surge is expected to lead to lighter issuance early next year.

Reporting By Karen Pierog; Editing by Steve Orlofsky and Meredith Mazzilli

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