PHOENIX - The Associated Press Municipal Bond Index, AP's first branded financial markets index to be introduced since Franklin D. Roosevelt's presidency, launched Monday in preparation for a wider rollout later this year.
The new index, launched in partnership with Municipal Bond Information Services, will be updated hourly throughout the day, said global business editor Lisa Gibbs. The product was first announced in April, and the "soft launch" this week will be followed by a full launch in early September. The index is the only benchmark based on observable, intraday pre-trade and trade data.
Gibbs said that the AP views coverage of state and local governments as one of its strongest suits, noting that the wire service's reporters are stationed in every state capitol. AP's readers are largely made up of the people most affected by the borrowing decisions of states and municipalities, she said.
"We're writing for consumers," said Gibbs. "Not traders, not investors."
She explained the move in more detail in an internal memo subsequently made public by the AP.
"This initiative fits with AP's mission in a couple of ways," Gibbs wrote. "First, an awful lot of individual investors buy muni bonds (as opposed to institutions like hedge funds). These are people who like the idea of tax-free income — and who read AP news. Second, these bonds — debt securities issued by local governments to raise money for capital projects like roads — offer windows into the financial health and doings of our states and cities, where AP's reporting is second to none. We can use this data to strengthen that coverage."
The index provides users with a bar and line chart showing benchmark history and yields, as well as data tables providing a variety of trade data. MBIS, a national consortium of municipal interdealer brokers, has touted the index as a way to both help financial institutions gain insight into muni market trends and to help further the oft-repeated goal of bringing more transparency to the $3.7 trillion market.
The AP's previous foray into market indexing began in 1935 with the launch of the Associated Press Average, which tracked 60 stocks listed on the New York Stock Exchange. AP discontinued the index in the mid-1990s.
