The Bond Buyer’s weekly yield indexes declined this week, as tax-exempts showed gains in nearly all the week’s sessions.
“It was another real solid week. Munis feel pretty darn good,” said Evan Rourke, portfolio manager at Eaton Vance. “We’re seeing some extension from shorter trades, the new issues this week seemed to go real well, there’s a strong Treasury market, the addition of some more BABs ... really some of the same old stories, but you really managed to have quite a nice week in munis, and yields have come down a bit.
“You’re talking about 20-year yields well below 4% now and 10-year yields well below 3%, and yet you’re still seeing real good strong interest,” Rourke continued. “I think definitely the secondary market has become more important, just because of the lack of deal flow, the low volume in the primary market, and it’s made it a little more important. You had definitely broad buying interest. You had individuals in there, dealers, customers, the whole thing.”
Leading the new-issue market, Morgan Stanley priced $491.8 million of bonds for Utah, Merrill Lynch & Co. priced $404.4 million of debt for the Missouri Highways and Transportation Commission, and Wachovia Bank NA priced $321.9 million of bonds for Miami-Dade County.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined 13 basis points this week to 4.20%. This is the lowest level for the index since Jan. 17, 2008, when it was 4.15%.
The 11-bond index of higher-grade 20-year GO yields declined 15 basis points this week to 3.93%, which is the lowest level since Aug. 17, 1967, when it was 3.91%.
The revenue bond index, which measures 30-year revenue bond yields, declined 35 basis points this week to 4.98%. This is the lowest level since May 15, 2008, when it was also 4.98%.
The 10-year U.S. Treasury note yield six basis points this week to 3.40%, which is its highest level since Aug. 27, when it was 4.47%.
The 30-year U.S. Treasury bond was unchanged this week at 4.18%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined 18 basis points to 0.60%, which is the lowest since June 3, when it was at its all-time low of 0.58%. The index began in July 1989.
The weekly average yield to maturity on The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term municipal bond prices finished at 5.12%, down eight basis points from last week’s 5.20%.
