Muni Bonds Extend 2014 Rally With First March Gain in Six Years

April 2 (Bloomberg) -- The $3.7t municipal market gained in March for the first time in six yrs, extending a 2014 advance as localities slowed bond offerings.

* Munis earned 3.8% in 1Q, best start to a yr since a gain of

4.4% in first three months of 2009, Bank of America Merrill

Lynch data show; the 0.2% gain last month broke a five-yr

losing streak for March, the longest for any month * The local-bond market has outpaced Treasuries and corporate

debt in part because the $59b of muni issuance last quarter

was the slowest since the three months ended June 2011, data

compiled by Bloomberg show * “Munis eking out a positive return is as much about limited

supply as anything else, which has been the story all

year,” said David Manges, muni trading manager at BNY

Mellon Capital Markets LLC in Pittsburgh * The gains are defying predictions of a second yr of negative

total returns, following a 2.9% slide in 2013; in the 10

cases since 1989 that munis rallied in March, the bonds

extended gains in April five times and posted losses in the

other five years, Bank of America data show

For Related News and Information: Best Start Since ’09 Defies Forecast of Annual Loss: Muni Credit NSN N345686TTDSE <GO> Puerto Rico Digested Signals Rally on Issuance Drop: Muni Credit NSN N2E8QU6S9728 <GO>

To contact the reporter on this story: Brian Chappatta in New York at +1-212-617-0698 or To contact the editors responsible for this story: Stephen Merelman at +1-212-617-3762 or Mark Tannenbaum, Mark Schoifet