The Bond Buyer’s weekly yield indexes declined this week, as the tax-exempt market firmed slightly in each of the week’s sessions.
“It’s been very firm,” said George Strickland, managing director and portfolio manager at Thornburg Investment Management.
“Rates are grinding lower, deals are getting done, amid reduced volume,” he said. “The big deal of the week, the [Municipal Electric Authority of Georgia] deal, was mostly taxable, and that seems to be the focus of the market. Tax-exempts are an afterthought.”
Strickland said he’d be surprised “if we carry the firmness into next week, but I’ve been sort of waiting for the market to crack around the edges for weeks, and it hasn’t happened yet.”
Leading the new-issue market this week, Goldman, Sachs & Co. priced $1.2 billion of Project J taxable Build America Bonds for MEAG. RBC Capital Markets priced $599.4 million of bonds for the Dormitory Authority of the State of New York in two series, including $190.6 million of taxable BABs.
The Bond Buyer 20-bond index of 20-year GO yields dropped two basis points this week to 4.34%. This is the lowest the index has been since Feb. 11, when it was also 4.34%.
The 11-bond index of higher-grade 20-year GO yields fell one basis point this week to 4.06%, which is its lowest level since Feb. 11, when it was also 4.06%.
The revenue bond index, which measures 30-year revenue bond yields, declined one basis point this week to 4.93%, which is the lowest the index has been since Jan. 21, when it was 4.91%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined one basis point this week to an all-time low of 0.40%. The previous record low for the index, which began on July 12, 1989, was 0.41% last week.
The yield on the 10-year Treasury note declined three basis points this week to 3.61%, which is the lowest the yield has been since Feb. 4, when it was 3.60%.
The yield on the 30-year Treasury bond also dropped three basis points this week to 4.56%, which is its lowest level since Feb. 4, when it was 4.53%.
The average weekly yield to maturity of The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term bond prices, declined one basis point this week, to 5.30%.
That is the lowest weekly average for the yield since the week ended Oct. 29, 2008, when it was 5.21%.
