Nearly all The Bond Buyer's weekly yield indexes increased this week amid "very sloppy" conditions in the municipal market.

"We're still trying deal with liquidity issues and some degree of forced selling," said Evan Rourke, portfolio manager at MD Sass. "We did have some hopeful signs during the week. The new-issue market re-opened, the individual investors continue to be actively involved, short-term rates have dropped, so that should encourage people to migrate further out the curve. But in general, it's just a very sloppy market at the moment."

The municipal market was firmer by about two basis points last Friday, and then again Monday, as it showed little immediate reaction to the House passing the Senate-approved version of the much-discussed $700 billion federal government bailout plan.

The tax-exempt market was unchanged to weaker by two basis points Tuesday, as two deals worth about $1 billion total came to market after weeks of primary market inactivity.

In the new-issue market yesterday, Goldman, Sachs & Co. priced $605 million of bonds for New York's Long Island Power Authority. Morgan Stanley priced $375 million of debt for the Kentucky State Property and Buildings Commission.

Wednesday, the muni market weakened amid a sprinkling of new issues, as participants dealt with news that the Federal Reserve slashed the federal funds rate target 50 basis points to 1.50%, in a coordinated move with other central banks. The emergency interest rate cut came three weeks before the next scheduled Fed meeting.

In the new-issue market yesterday, Massachusetts finally priced its $750 million note sale, which was first postponed last week and was then again put on the shelf Tuesday.

On Thursday, the municipal market was weaker by five or six basis points in light activity.

The Bond Buyer 20-bond index of GO yields and the 11-bond index both rose 11 basis points this week to 5.47% and 5.37%, respectively. This is the highest level for the 20-bond index since Nov. 21, 2000, when it was 5.55%. It's also the highest level for the 11-bond index since Nov. 30, 2000, when it was 5.40%.

The revenue bond index rose 28 basis points this week to 5.97%, which is the highest level since June 29, 2000, when it was 5.98%.

The 10-year Treasury note index rose 16 basis points this week to 3.80%, but it remained below its level from two weeks ago, when it was 3.87%.

The 30-year Treasury bond index fell four basis points this week to 4.11%. This is the lowest Thursday level for the bond since The Bond Buyer began tracking it in September 1979.

The Bond Buyer one-year note index fell five basis points this week, to 2.39%, but it remained above its 2.19% level from two weeks ago.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 6.01%, up nine basis points from last week's 5.92%.

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