Nearly all The Bond Buyer’s weekly yield indexes declined this week, as the municipal market rebounded from last week’s losses.
“The market was dragging a little last week, but we’ve turned that around,” said Evan Rourke, portfolio manager at Eaton Vance. “Munis started to feel a little better. There’s been at least a decent tone to the market this week, There are institutional buyers putting money to work.
“There’s been a rally mostly in the belly of the curve, the 10-year portion,” he said. “That part had underperformed over the previous couple of weeks, so it was probably playing a little bit of catch-up. A lot of interest in March was driven by individual investors in the absence of institutional buyers. Well, they’re back. They left responding perhaps to rising Treasury yields, but as they are coming back, we’re seeing those yields come down as well.”
Leading the new-issue market this week, Bank of America Merrill Lynch priced $1.04 billion of bonds for Chicago on behalf of O’Hare International Airport. Also, RBC Capital Markets priced $459.8 million of taxable and tax-exempt debt for the California State Public Works Board in multiple series.
The Bond Buyer 20-bond index of 20-year general obligation bond yields dropped two basis points this week to 4.43%. This is the lowest the index has been since March 18, when it was 4.32%.
The 11-bond index of higher-grade 20-year GO yields also declined two basis points this week, to 4.14%. It is now at its lowest level since March 18, when it was 4.05%.
The revenue bond index, which measures 30-year revenue bond yields, was unchanged this week at 4.96%. It remains at its highest level since Feb. 18, when it was 4.97%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, dropped five basis points this week, to 0.48%, but it remained above its 0.43% level from two weeks ago.
The yield on the 10-year Treasury note declined five basis points this week to 3.84%, the same level it reached two weeks ago.
The yield on the 30-year Treasury bond slid three basis points this week to 4.72%, the same level as two weeks ago.
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 5.20%, down two basis points from last week’s 5.22%.