/MUNIS: *** What's the implication of the...>

US TSYS: /MUNIS: *** What's the implication of the US Tsy's suspension noon ET

Friday of its SLUGS (State and Local Govt Secs.) which are issued in connection

with muni bonds? It could help short-end Treasuries demand, as municipal bond

issuers need to turn to Treasuries in connection with muni bond issuance. 

- Academy Securities' Glen Capelo said "this should help out the front end

Treasuries demand, as state and local entities who normally use the SLUGS

program" in connection with muni bond issuance "will have to go into the open

market to purchase US Treasury debt." 

- Not only that but "it could have a bigger than normal impact" than in prior

government debt limit episodes, "given the robust municipal bond issuance

calendar expected into the end of the year," Capelo said. (Muni bonds issuers

were expected to hurry to issue into the year-end 2017, as they worried that

there might not be such favorable tax treatment in the new tax bill/legislation

in 2018.)