Indexes Rise as Market Has Heavy Tone With Fewer Bids

Most of The Bond Buyer's weekly yield indexes rose this week, as a number of large issues weighed on the market.

"We certainly feel weaker," said Evan Rourke, portfolio manager at MD Sass. [Yesterday], in particular, the market had a heavy tone to it. There's more and more offerings. Dealers saying 'We'd like to move this.' Offers are getting pretty stale, and it's the end of the quarter for some people. ... There's not a lot of bids out there."

The market was little changed to weaker last Friday, despite gains in the Treasury market. On Monday, the market was largely unchanged in quiet trading. The Treasury market was also mostly unchanged on the day.

On Tuesday, the municipal market was weaker, with a number of large issues entering the market. JPMorgan priced $700.66 million in power revenue bonds for the Puerto Rico Electric Power Authority and Morgan Stanley & Co.priced $389 million in general obligation bonds for Connecticut.

The market was again weaker on Wednesday despite gains in Treasuries. A number of large issues came to the market including $1.75 billion in senior-secured notes and bonds for Florida's Citizens Property Insurance Corp. priced by Merrill Lynch & Co.

Also on Wednesday, Morgan Stanley priced $616.3 million in revenue bonds for the Dormitory Authority of the State of New York. JPMorgan priced for retail investors $600 million Prairie State Energy campus project revenue bonds for Ohio's American Municipal Power Inc. And Goldman, Sachs & Co. priced $453.9 million service contracts revenue refunding bonds for the New York State Urban Development Corp.

Yesterday, municipal bonds were weaker again, reflecting Treasuries.

The 20-Bond GO index rose seven basis points this week, to 4.76%, which is the highest since April 3, 2008 (11 weeks ago), when it was 4.90%.

The 11-Bond GO index rose six basis points, to 4.66%, which is the highest since April 3, 2008 (11 weeks ago), when it was 4.82%.

The revenue bond index rose six basis points, to 5.20%, which is the highest since March 27, 2008 (12 weeks ago), when it was 5.24%.

Yields on the 10-year Treasury note and 30-year Treasury bond were unchanged this week, at 4.22% and 4.77%, respectively.

The one-year note index rose one basis point, to 1.73%, but it remained below its 1.76% level from two weeks ago.

The weekly average yield to maturity of The Bond Buyer 40-bond municipal bond index was unchanged this week at 5.17%.

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