Almost All Yields Decline in Short Week

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Nearly all The Bond Buyer’s yield indexes declined slightly during this holiday-shortened week amid moderate secondary trading activity and rising Treasury yields.

Michael Pietronico, chief executive officer at Miller Tabak Asset Management, said the market has handled the past month’s onslaught of primary issuance well.

“However,” he added, “there is the BAB extension or lack thereof hanging over the market, and an anticipation of heavy supply from issuers to come before the program potentially goes away.”

Pietronico said that secondary trading volume seems to be down, but transactions are occurring, albeit with a little more give in the offered side.

Leading the new-issue market, Barclays Capital priced $1.5 billion for the New Jersey Transportation Trust Fund Authority, including $1 billion of taxable Build America Bonds.

Also, Siebert Brandford Shank & Co. priced $267 million for Los Angeles, including $177.4 million of BABs.

The Bond Buyer 20-bond index of 20-year general obligation bond yields declined two basis points this week to 3.82%. That is the lowest level for the index since May 4, 1967, when it was 3.79%.

The 11-bond GO index of higher-grade 20-year GO yields also fell two basis points this week, to 3.56%, which is the lowest the index has been since April 20, 1967, when it was 3.53%.

The revenue bond index, which measures 30-year revenue bond yields, declined one basis point this week to 4.57%. That is its lowest level since May 31, 2007, when it was 4.57%.

The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, also dropped one basis point this week, to 0.47%, but remained above its 0.44% level from two weeks ago.

The yield on the 10-year Treasury note rose 10 basis points this week to 2.50%, but remained below its 2.52% level from two weeks ago.

The yield on the 30-year Treasury bond gained 18 basis points this week to 3.90%, its highest level since 3.93% on Sept. 16.

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 4.87%, unchanged from last week.

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