Yields Mostly Decline in 'Pretty Solid Week for Munis’

Nearly all of The Bond Buyer’s weekly yield indexes declined this week, as the market firmed up in most of the week’s sessions.

“It was a pretty solid week for munis,” said Evan Rourke, portfolio manager at Eaton Vance. “There’s a lot of reinvestment money still floating around. There’s a little bit of a spread-steepener, but generally the feeling has been pretty good. We’re writing a lot of smaller-size tickets, indicating that individual investors are in there buying bonds.

“Institutionally, a lot has been focused on the new issues, but the new-issue deals have been getting priced fairly to the market without really large concessions, and they’re getting done. Munis have a decent tone, and it should be an interesting quarter-end.”

In the new-issue market this week, the Dormitory Authority of the State of New York came to market with $808.6 million of state personal income tax revenue bonds, priced by JPMorgan and Ramirez & Co. Morgan Stanley priced $392.4 million of bonds for Kentucky, including $209.2 million of taxable Build America Bonds. In the short-term market, Idaho sold $500 million of tax anticipation notes, priced by Seattle-­Northwest Securities Corp.

The Bond Buyer 20-bond index of 20-year general obligation bond yields declined seven basis points this week to 4.79%. This is the lowest the index has been since June 4, when it was 4.71%.

The 11-bond index of higher-grade 20-year GO yields also declined seven basis points this week, to 4.53%. This is the lowest the index has been since June 4, when it was 4.45%.

The revenue bond index, which measures 30-year revenue bond yields, declined one basis point this week to 5.77%, but it remained above the 5.76% level it reached two weeks ago.

The 10-year Treasury note yield dropped 31 basis points this week to 3.54%. This is the lowest the yield has been since May 21, when it was 3.36%.

The 30-year Treasury yield declined 30 basis points this week to 4.33%. It has not been lower since May 21, when it was 4.31%.

The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose one basis point this week to 0.67%. This is the highest the index has been since May 20, when it was 0.74%.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index, which is based on long-term bond prices, declined three basis points this week to 5.44%. That was the lowest weekly average for the yield to maturity since the week ended June 4, when it was 5.42%.

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