The Bond Buyer’s weekly yield indexes were mixed this week, as the municipal market meandered in both directions at times, leaving the market at roughly the same levels from a week ago.
“I think we’re drifting,” said George Strickland, managing director and portfolio manager at Thornburg Investment Management. “I don’t know we got better or worse. It looks like some of the new deals that priced this week are trading at up levels this week, but that’s sort of to be expected, I think. So I think we sort of drifted around the mean.”
“I’ve seen healthy demand [in the new-issue market],” he said. The $800 million New York City Transitional Finance Authority deal “seems to be getting done. I think they had some good solid retail interest, and then institutions coming in, and last I heard there were only one or two maturities that weren’t fully subscribed for, and it’s getting done at pretty tight levels, through my eyes. There was a reduced calendar this week, which combined with a lot of cash hitting the market in July, seems to be driving demand pretty nicely.”
The TFA priced an $800 million transaction for institutions yesterday following a two-day retail order period.
The Bond Buyer 20-bond index of 20-year general obligation bond yields rose one basis point this week to 4.69%. However, it remained below its 4.71% level from two weeks ago.
The 11-bond index of higher-grade 20-year GO yields also rose one basis point this week, to 4.40%. This was still below its 4.43% level from two weeks ago.
The revenue bond index, which measures 30-year revenue bond yields, also rose one basis point this week, to 5.67%, although this remained below its 5.70% level from two weeks ago.
The 10-year Treasury note yield rose 12 basis points this week to 3.69%. This is the highest the yield has been since June 18, when it was 3.85%.
The 30-year Treasury bond yield rose 13 basis points this week to 4.58%. This is the highest level for the yield since June 18, when it was 4.63%.
The Bond Buyer’s one-year note index, which is based on one-year tax-exempt note yields, declined nine basis points for the second consecutive week, to 0.72%. It is now at its lowest level since June 24, when it was 0.67%.
The weekly average yield to maturity on The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term bond prices finished at 5.58%, up three basis points from last week’s 5.55%.
