1
 The municipal bond market is bracing for tough times through the end of the year 
5027
span

2
as it struggles to absorb an oversupply of bonds 
5001
List

3
and two of its best customers turn into sellers.
5005
span

4
 Commercial banks and property/casualty insurers, 
5003
span

5
which together own about 36% of all municipal bonds, 
4
elaboration-additional-e

6
have been dumping their securities for weeks.
5004
Same-Unit

7
 Last week, 
5006
span

8
traders said, 
7
attribution-e

9
there were three institutional sellers for every buyer.
5007
Same-Unit

10
 Every day we're getting new bid lists from would-be sellers, 
5009
span

11
one trader said.
10
attribution

12
 Most dealers cannot continue to absorb this supply.
5009
interpretation-s

13
 As a result, yields on long-term muni bonds now stand at about 95% of long-term Treasury yields, the highest such level in more than two years.
5029
span

14
 There is incredible negative psychology building in the market, 
5015
span

15
said Donna Avedisian, a vice president at Merrill Lynch & Co.
14
attribution

16
 People are very concerned about who is going to step up to the plate and buy municipal bonds in the absence of institutional buyers.
5015
elaboration-general-specific

17
 The yield on a group of 25 revenue bonds 
5031
span

18
compiled by the Bond Buyer, a trade publication, 
17
elaboration-object-attribute-e

19
now exceeds 7.50%.
5018
Same-Unit

20
 At this week's New York City bond sale, traders expect yields on the 20-year New York bonds to nearly match the 7.9% yield on 30-year Treasury bonds.
5033
span

21
 For an investor in the 28% federal tax bracket, 7.9% tax-free is the same as 10.38% on a taxable investment.
5034
span

22
 That's a taxable-equivalent yield nearly three percentage points more than the current yield on 30-year Treasury bonds. 
21
restatement

23
How quickly things change.
5043
span

24
 This past summer, investors' appetite for municipal bonds seemed insatiable.
5036
span

25
 Individuals eager for tax-free income drove up bond prices, 
5035
span

26
making state and local government debt one of the best-performing types of fixed-income investments during the period. 
25
consequence-s

27
 But 
5040
Same-Unit

28
while analysts say 
29
attribution

29
that municipal bonds still offer good value, 
5037
span

30
you wouldn't know it by the way 
5038
span

31
institutional investors are rushing to dump their holdings.
30
elaboration-object-attribute-e

32
 Bond market analysts say 
33
attribution

33
the institutional selling was triggered by several factors. 
5046
span

34
Big banks such as Chemical Bank and Chase Manhattan,
5048
span

35
 which have been taking heavy charges 
5047
span

36
to expand their Third World loan-loss reserves, 
35
purpose

37
aren't looking for tax-exempt income.
5049
Same-Unit

38
 We don't need the shelter of tax-free bonds, 
5050
span

39
said a spokeswoman at Chemical.
38
attribution

40
 In recent weeks, 
5051
span

41
traders said, 
40
attribution-e

42
Chemical has sold more than $1 billion of tax-free bonds.
5052
Same-Unit

43
 The spokeswoman confirmed 
44
attribution

44
that the bank has significantly reduced its muni holdings,
5054
span

45
 but couldn't immediately confirm the amount.
5055
span

46
 Insurance companies are rushing to sell before the end of the year, 
5061
span

47
when some of their tax benefits 
5059
span

48
associated with municipal bonds 
47
elaboration-object-attribute-e

49
will be phased out. 
5060
Same-Unit

50
There is speculation that property/casualty firms will sell even more munis 
5064
span

51
as they scramble to raise cash 
5063
span

52
to pay claims 
5062
span

53
related to Hurricane Hugo and the Northern California earthquake.
52
elaboration-object-attribute-e

54
 Fundamental factors are at work as well.
5075
span

55
 Muni bond holders are worried about the impact of a slowing economy on tax revenue, at a time 
5069
span

56
when many state and local governments already face budget deficits and huge spending needs.
55
elaboration-object-attribute-e

57
 The recent natural disasters, and the need of many other cities 
5070
span

58
to rebuild crumbling infrastructure, 
57
elaboration-object-attribute-e

59
suggests 
5071
Same-Unit

60
that supply of new issues will continue to rise sharply 
5073
span

61
-- even as demand tapers off.
60
concession

62
 There is just so much going on 
5078
consequence-n

63
that it's difficult to pick just one factor 
5078
span

64
that's driving the market, 
63
elaboration-object-attribute-e

65
said Ronald Ian Heller, vice president at First Chicago Capital Markets Inc., a subsidiary of First Chicago Corp. 
5077
attribution

66
 Some of the recent selling could actually be considered a positive sign.
5083
span

67
 Mutual funds, for example, are said to be selling existing municipal bonds 
5082
span

68
to raise cash 
5081
span

69
to buy new issues.
68
purpose

70
 Because municipal bonds yields have risen at a time 
5084
span

71
when interest rates generally have fallen, 
70
elaboration-object-attribute-e

72
some portfolio managers are assuming 
5088
attribution

73
that bonds 
5086
span

74
bought now 
73
elaboration-object-attribute-e

75
will appreciate in value 
5087
Same-Unit

76
as the municipal bond market rebounds.
5087
contingency

77
 Ms. Avedisian believes 
5093
attribution

78
that the mutual funds are selling muni bonds 
5093
span

79
that have a negative convexity 
5095
span

80
-- those 
5094
span

81
that have appreciated in price slowly relative to the decline in interest rates. 
80
elaboration-object-attribute-e

82
Such bonds, 
5096
span

83
she says, 
82
attribution-e

84
are those 
5097
span

85
that are nearing their call date.
84
elaboration-object-attribute-e

86
 But traders said 
5100
attribution

87
the market's tone could pick up this week 
5100
span

88
if New York City's $787 million bond offering goes well.
87
hypothetical

89
 The offering will include $729 million of 20-year tax-exempt bonds and $57.8 million of taxable bonds.
5101
elaboration-part-whole

90
 A few weeks ago, New York sold $750 million of tax-exempts.
5105
Contrast

91
 New York City bonds have been beaten down for three straight weeks.
5104
span

92
 On Friday, some issues fell nearly one point, or close to $10 for each $1,000 face amount.
91
evidence

93
 The sell-off in New York City bonds was triggered by concerns about the city's financial health and political uncertainty in view of the impending mayoral election.
5110
span

94
 The city's economy is growing weaker 
5107
Contrast

95
and expenditures are rising 
5107
Contrast

96
as tax revenue is falling.
5108
Temporal-Same-Time

97
 The city has issued so much supply recently 
5113
span

98
that some people are getting a little concerned.
97
consequence-s

99
 They'd like to see some other names in their portfolios, 
5114
span

100
said Michael S. Appelbaum, first vice president at Shearson Lehman Hutton.
99
attribution

101
 But he thinks 
102
attribution

102
investors may be overreacting to the market's problems. 
5116
span

103
Overall, 
5118
span

104
he says, 
103
attribution-e

105
municipal prices are very cheap 
5119
Same-Unit

106
and represent an excellent buying opportunity.
5120
List

107
 Friday's Market Activity 
5163
TextualOrganization
Title
108
 Treasury bonds fell sharply on confusion about this week's Treasury debt auction and rumors 
5126
span

109
that a major Japanese investor was unloading large amounts of long-term bonds. 
108
elaboration-object-attribute-e

110
 The Treasury's benchmark 30-year bond ended at a price of 102 2/32, down nearly 5/8 point from Thursday, or about $6.25 for each $1,000 face amount.
5128
Temporal-Same-Time

111
 The issue's yield rose to 7.93% from 7.88%.
5128
Temporal-Same-Time

112
 Late Thursday, the Treasury said 
5130
attribution

113
it needed to raise $17 billion quickly 
5130
span

114
and would do so 
5129
span

115
by issuing new securities this week. 
114
means

116
 Credit market analysts expected the Treasury to cancel today's three-month and six-month sale and to sell $17 billion of cash management bills.
5138
antithesis

117
 Instead, the Treasury announced 
118
attribution

118
it would sell $2 billion of 51-day cash management bills today 
5134
span

119
and said 
5136
attribution

120
that the weekly sale of $15.6 billion of three-month and six-month bills will take place today, as usual, 
121
concession

121
but the sale will settle tomorrow instead of Thursday.
5136
span

122
 By moving the settlement date ahead, 
5141
means

123
the Treasury can raise money under the $2.87 trillion debt ceiling 
5140
span

124
that is in effect through tomorrow, 
123
elaboration-object-attribute-e

125
after which it reverts to $2.8 trillion. 
5140
temporal-before

126
 The market also was hurt by rumors 
5144
span

127
that Nippon Kangyo Kakumaru, a Japanese brokerage firm, was unloading some of the 30-year bonds 
5145
span

128
it recently purchased.
127
elaboration-object-attribute-e

129
 One dealer said 
130
attribution

130
the talk was that the firm sold about $500 million of bellwether 30-year bonds.
5146
span

131
 The firm is thought to have purchased up to $3 billion of 30-year bonds in a buying spree on Wednesday and the previous Thursday.
5147
background

132
 Dealers say 
5150
attribution

133
the firm apparently has wanted to publicize its recent buying and subsequent selling of 30-year bonds 
5150
span

134
by using Cantor Fitzgerald Securities Corp. as a broker.
5151
span

135
 Cantor provides price quotes to Telerate Systems Inc., a widely used electronic system.
134
background

136
 Nippon Kangyo's moves puzzled traders 
5154
List

137
and created confusion among potential investors, 
5155
span

138
many of whom decided to stay out of the market.
137
elaboration-general-specific-e

139
 As a result of its large-scale buying, 
5159
result

140
some analysts now say 
5160
attribution

141
that liquidity, or the ability 
5158
span

142
to easily buy and sell,
141
elaboration-object-attribute-e

143
 has been constrained in the benchmark Treasury bond issue. 
5160
Same-Unit

144
 In other markets: 
5198
TextualOrganization
Title
145
 -- The junk bonds of RJR Nabisco Inc. rallied Friday on news 
5165
span

146
that the company is selling its candy bar brands to Nestle Foods Corp. for $370 million.
145
elaboration-object-attribute-e

147
 The sale price, 
5166
span

148
which was above Wall Street expectations, 
147
elaboration-additional-e

149
sent many RJR securities up by one point.
5167
Same-Unit

150
 It shows that there are buyers of high-quality assets at high prices in today's market, 
5169
span

151
said Robert Long, managing director and head of the high-yield research department at First Boston Corp. 
150
attribution

152
 Many of the RJR securities, 
5171
span

153
which had been trading near their 52-week lows earlier in the session, 
152
elaboration-additional-e

154
bounced back after the company's announcement 
5173
span

155
that it agreed to sell its Baby Ruth, Butterfinger and Pearson candy businesses to Nestle Foods, a unit of the Swiss-based food concern.
154
elaboration-object-attribute-e

156
 The sale, 
5175
span

157
expected to close before the end of the year,
156
elaboration-additional-e

158
 also includes a manufacturing plant in Franklin Park, Ill. 
5176
Same-Unit

159
 RJR's subordinated discount debentures of 2001, 
5178
span

160
which traded as low as 45 Friday, 
159
elaboration-additional-e

161
finished the day at 46 7/8.
5179
Same-Unit

162
 Other RJR securities also closed higher. 
5184
span

163
RJR Holdings Capital Corp. 's 14.7% convertible pay-in-kind securities 
5181
span

164
maturing in 2009 
163
elaboration-object-attribute-e

165
closed 1/2 higher at 86 1/2 
5182
Same-Unit

166
after trading as low as 85 1/4. 
5182
temporal-after

167
 Most other junk bond issues finished a quarter-point lower on rumors 
5186
span

168
that Campeau Corp. was filing for protection from creditors under Chapter 11 of the Bankruptcy Code.
167
elaboration-object-attribute-e

169
 A spokesman for Campeau called the rumors ridiculous.
5186
comment

170
 Most investment-grade bonds fell 3/8 to 1/2 point.
5187
elaboration-general-specific

171
 -- Mortgage securities fell 7/32 to 8/32 
172
antithesis

172
but held up better than intermediate Treasurys. 
5190
span

173
 Dealers said 
5193
attribution

174
some defensive investors were buyers of mortgages, 
5193
Analogy

175
as were dealers 
5191
span

176
seeking collateral for REMICs
5192
span

177
 priced earlier last week.
176
elaboration-object-attribute-e

178
 Among major issues, Government National Mortgage Association 9% securities for November delivery ended at 98 12/32, down 8/32 point for a yield of about 9.35% to a 12-year average life assumption. 
5195
example

5001
multinuc
1
circumstance

5002
span



5003
span
5004
Same-Unit

5004
multinuc
5025
span

5005
span
5001
List

5006
span
5007
Same-Unit

5007
multinuc
5004
evaluation-s

5008
span



5009
span
5026
span

5010
span



5011
span



5012
span



5013
span



5014
span



5015
span
5016
span

5016
span
5019
span

5017
span
5018
Same-Unit

5018
multinuc
5016
consequence-s

5019
span
5030
cause

5020
span



5021
span



5022
span



5023
span



5024
span
5125
span

5025
span
3
elaboration-set-member

5026
span
13
result

5027
span
5030
span

5028
span



5029
span
5027
elaboration-additional

5030
span
5044
span

5031
span
5017
span

5032
span



5033
span
5024
span

5034
span
20
explanation-argumentative

5035
span
24
elaboration-general-specific

5036
span
5041
Contrast

5037
span
5038
antithesis-e

5038
span
5039
span

5039
span
5040
Same-Unit

5040
multinuc
5041
Contrast

5041
multinuc
23
elaboration-general-specific

5042
span



5043
span
5033
comment

5044
span
5045
span

5045
span
5164
Topic-Shift

5046
span
5068
span

5047
span
34
elaboration-additional-e

5048
span
5049
Same-Unit

5049
multinuc
5058
span

5050
span
5053
span

5051
span
5052
Same-Unit

5052
multinuc
5050
evidence

5053
span
5056
List

5054
span
45
antithesis

5055
span
5056
List

5056
multinuc
5049
comment

5057
span
5067
List

5058
span
5057
span

5059
span
5060
Same-Unit

5060
multinuc
46
reason

5061
span
5066
span

5062
span
51
purpose

5063
span
50
circumstance

5064
span
5061
elaboration-general-specific

5065
span



5066
span
5067
List

5067
multinuc
5046
elaboration-general-specific

5068
span
5076
List

5069
span
5074
span

5070
span
5071
Same-Unit

5071
multinuc
5073
attribution

5072
span
5069
example

5073
span
5072
span

5074
span
54
elaboration-general-specific

5075
span
5076
List

5076
multinuc
5080
span

5077
span
5079
span

5078
span
5077
span

5079
span
5076
interpretation-s

5080
span
5124
Contrast

5081
span
67
purpose

5082
span
5091
span

5083
span
5123
span

5084
span
5089
reason

5085
span



5086
span
5087
Same-Unit

5087
multinuc
5088
span

5088
span
5089
span

5089
span
5090
span

5090
span
5082
explanation-argumentative

5091
span
66
example

5092
span
5099
span

5093
span
5092
span

5094
span
79
definition-e

5095
span
78
elaboration-object-attribute-e

5096
span
5098
Same-Unit

5097
span
5098
Same-Unit

5098
multinuc
5092
elaboration-general-specific

5099
span
5111
Contrast

5100
span
5101
span

5101
span
5103
span

5102
span



5103
span
5106
span

5104
span
5105
Contrast

5105
multinuc
5103
background

5106
span
5111
Contrast

5107
multinuc
5108
Temporal-Same-Time

5108
multinuc
93
elaboration-general-specific

5109
span



5110
span
5122
span

5111
multinuc
5112
span

5112
span
5083
interpretation-s

5113
span
5115
span

5114
span
5113
comment

5115
span
5117
span

5116
span
5121
span

5117
span
5110
interpretation-s

5118
span
5119
Same-Unit

5119
multinuc
5120
List

5120
multinuc
5116
explanation-argumentative

5121
span
5115
interpretation-s

5122
span
5111
explanation-argumentative

5123
span
5124
Contrast

5124
multinuc
5024
elaboration-additional

5125
span
5044
consequence-n

5126
span
5127
span

5127
span
5132
span

5128
multinuc
5126
consequence-s

5129
span
113
enablement

5130
span
5131
span

5131
span
5127
comment

5132
span
5133
span

5133
span
5157
List

5134
span
5138
List

5135
span
5132
interpretation-s

5136
span
5142
span

5137
span



5138
multinuc
5135
span

5139
span
5142
explanation-argumentative

5140
span
5141
span

5141
span
5139
span

5142
span
5143
span

5143
span
5138
List

5144
span
5147
span

5145
span
126
elaboration-object-attribute-e

5146
span
5144
elaboration-general-specific

5147
span
5148
span

5148
span
5153
span

5149
span
5148
interpretation-s

5150
span
5149
span

5151
span
133
means

5152
span
5156
span

5153
span
5152
span

5154
multinuc
5152
comment

5155
span
5154
List

5156
span
5157
List

5157
multinuc
5162
span

5158
span
5160
Same-Unit

5159
span
5161
span

5160
multinuc
5159
span

5161
span
5157
interpretation-s

5162
span
5163
TextualOrganization
Text
5163
multinuc
5199
Topic-Shift

5164
multinuc



5165
span
5168
span

5166
span
5167
Same-Unit

5167
multinuc
5165
elaboration-additional

5168
span
5170
span

5169
span
5168
interpretation-s

5170
span
5174
span

5171
span
5172
Same-Unit

5172
multinuc
5170
consequence-s

5173
span
5172
Same-Unit

5174
span
5177
span

5175
span
5176
Same-Unit

5176
multinuc
5174
elaboration-additional

5177
span
5180
span

5178
span
5179
Same-Unit

5179
multinuc
5177
consequence-s

5180
span
5185
span

5181
span
5182
Same-Unit

5182
multinuc
5183
span

5183
span
162
example

5184
span
5180
elaboration-additional

5185
span
5189
Contrast

5186
span
5187
span

5187
span
5188
span

5188
span
5189
Contrast

5189
multinuc
5197
List

5190
span
5195
span

5191
span
5193
Analogy

5192
span
175
elaboration-object-attribute-e

5193
multinuc
5194
span

5194
span
5190
explanation-argumentative

5195
span
5196
span

5196
span
5197
List

5197
multinuc
5198
TextualOrganization
Text
5198
multinuc
5199
Topic-Shift

5199
multinuc
5164
Topic-Shift

