Nearly all of The Bond Buyer’s weekly yield indexes declined this week, as tax-exempt bonds firmed up in nearly all sessions and new-issue supply lightened substantially from last week’s deluge.
“There was a lighter calendar, so there was less supply pressure out there,” said Fred Yosca, managing director and head of trading at BNY Capital Markets. “But there’s still an order out there for bonds. We’ve been seeing money put to work.
“I just don’t know where this money is coming from, because it’s not the time of year you typically see great retail flows. But there have been pretty good retail flows.
“And maybe with a lesser supply than a week ago, those issues that are coming are easier to digest, given the amount of cash that’s out there,” Yosca said. “But the market definitely has a good feel to it.”
After over $11 billion of new-issue supply came to market a week ago, the primary market quieted down this week. Several deals smaller than $400 million in size led the market.
Among them, Barclays Capital’s $381.6 tax-exempt and taxable offering for the Virginia College Building Authority, JPMorgan’s $305 million Dormitory Authority of the State of New York sale, and Raymond James & Co.’s $300 million Louisiana Citizens Property Insurance Corp. deal.
Against that backdrop, The Bond Buyer 20-bond index of 20-year general obligation bond yields declined eight basis points this week to 4.92%. This is the lowest that the index has been since Feb. 26, when it was 4.87%.
The 11-bond index of higher-grade 20-year GO yields declined seven basis points this week to 4.68%, which is the lowest level for the index since Feb. 26, when it was 4.65%.
The revenue bond index, which measures 30-year revenue bond yields, declined three basis points this week to 5.75%, which is the lowest it has been since Feb. 19, when it was 5.70%.
The 10-year U.S. Treasury note yield was unchanged at 2.75% this week.
The 30-year U.S. Treasury bond yield declined nine basis points this week to 3.57%, which is the lowest level since March 5, when it was 3.51%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt GO yields, declined 14 basis points to an all-time low of 0.65%. The index began on July 12, 1989.
The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.57%, unchanged from last week.