Nearly all The Bond Buyer’s yield indexes declined this week, as tax-exempts were unchanged to firmer in all the week’s sessions.
Evan Rourke, portfolio manager at Eaton Vance, said yesterday that this week has been a very solid week for munis.
“We kind of had a little bit of flattening, which I think is something people have been talking about because of all the [taxable Build America Bonds],” he said.
“Generally, we saw good interest for bonds. The new issues were well-received. It’s been kind of slow in the afternoon, but otherwise it’s been pretty good.”
“You’re heading into the large June and July reinvestment flows that will hit the market on the first of those months,” Rourke said.
“Historically, it’s been a good time for munis. I think, though, that the BABs are the major new point of interest. Everybody gets the reinvestment flows, but the BABs are the interesting new wild card.”
This week, several new sizeable BAB deals were priced in the new-issue market, including $500 million from the Illinois State Toll Highway Authority, and $261.5 million from the Utah Transit Authority. The Phoenix Civic Improvement Corp. led the tax-exempt market with a $540.3 million transaction.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined eight basis points this week to 4.54%. This is the lowest that the index has been since Sept. 11, 2008, when it was also 4.54%.
The 11-bond index of higher-grade 20-year GO yields also declined eight basis points this week, to 4.29%. The index has not been lower since Feb. 7, 2008, when it was 4.24%.
The revenue bond index, which measures 30-year revenue bond yields, declined 11 basis points this week to 5.46%. This is the lowest level for the index since Sept. 18, 2008, when it was 5.44%.
The 10-year U.S. Treasury note yield dropped 19 basis points this week to 3.11%, which is the lowest it has been since April 23, when it was 2.93%.
The 30-year Treasury bond yield also dropped 19 basis points this week to 4.07%, but it remained above its 4.05% level from two weeks ago.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, was unchanged at its all-time low of 0.59%, which it first reached on April 22.
The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.30%, which is down seven basis points from last week’s 5.37%.