Weekly Indexes Decline as Late Week Losses Temper Early Gains

The Bond Buyer’s weekly yield indexes declined this week, as losses Wednesday and yesterday failed to wipe out early gains. “We had a streak of winning days, but the music stopped Wednesday,” said Fred Yosca, managing director and head of trading at BNY Capital Markets. “I think the cessation of the uptrade was caused by insurance concerns. There could be a big change in the muni landscape, where it begins to return to the way it was before everything was insured, where people were looking at underlying ratings.”The municipal market was largely unchanged Friday, heading into the weekend. On Monday, tax-exempt yields were lower by one or two basis points, following the Treasury market. The market was again firmer by about one or two basis points Tuesday, a day which was headlined by the failure of Pennsylvania’s $706 million competitive bond sale, due to technical problems with Grant Street Group’s MuniAuction electronic bidding system. The commonwealth has since rescheduled its sale for next Thursday, and will be switching to Ipreo’s Parity.On Wednesday, weakness entered the market for the first time this week, as munis ended the session mixed overall, with gains on the short end, but some losses on the long end. Also Wednesday, the week’s largest deals came to market. The Alabama Public School and College Authority competitively sold $1.1 billion of capital improvement bonds to Lehman Brothers. Lehman priced $745 million of bonds for the Puerto Rico Public Buildings Authority, and Siebert, Brandford Shank & Co. priced $527 million of debt for Connecticut.Yesterday, tax-exempts were slightly weaker, with yields up about two basis points.The Bond Buyer 20-bond index of GO yields fell one basis point this week to 4.38%, its lowest level since Oct. 25, when it was 4.33%.The 11-bond index also dropped one basis point to 4.31%, its lowest level since Oct. 25, when it was 4.27%. The revenue bond index fell three basis points to 4.74%, the lowest level since Nov. 1 when it was 4.73%.The 10-year Treasury note, however, rose seven basis points to 4.02%, but remained below the 4.09% it registered two weeks ago.The 30-year Treasury bond rose 14 basis points to 4.49%, but remained below the 4.50% it registered two weeks ago.The Bond Buyer one-year note index fell 24 basis points to 3.04%, its lowest level in more than two years, since when it was 3.02% on Nov. 2, 2005.The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 4.79%, down one basis point from last week’s 4.80%.