Nearly all of The Bond Buyer’s weekly yield indexes rose this week, as cheapness particularly on the short-end of the curve permeated the market.
“The market the last two days has been real queasy,” said Evan Rourke, portfolio manager at Eaton Vance. “It’s really been the short end of the curve. The curve has gotten flatter. The long end seems fairly immune, there’s more weakness in the five- to 10-year range, which makes sense, since munis had been so rich there.
Several beefy transactions led the way in the primary market this week, most notably a $3.4 billion taxable issuance yesterday from California, priced by Citi and Bank of America Merrill Lynch which included $2.5 billion of taxable Build America Bonds. That deal was upsized from an originally planned $2 billion due to investor demand.
Meanwhile, a $2.15 billion JPMorgan-priced sale of tax-exempt bonds Tuesday for Florida’s Citizens Property Assurance Corp., and Siebert Brandford Shank & Co.’s Wednesday $930.2 million tax-exempt deal for the Los Angeles Department of Airports led the way in new issuance.
The Bond Buyer 20-bond index of 20-year general obligation bond yields rose 12 basis points this week to 4.44%. This is the highest the index has been since Aug. 27, 2009, when it was 4.53%.
The 11-bond index of higher-grade 20-year GO yields gained 10 basis points this week to 4.15%. It is now at its highest level since Aug. 27, 2009, when it was 4.27%. The revenue bond index, which measures 30-year revenue bond yields, rose one basis point this week to 4.93%. It is at its highest level since March 4, when it was also 4.93%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose eight basis points this week to 0.48%. This is the highest the index has been since Feb. 17, when it was also 0.48%.
The yield on the 10-year Treasury note increased 23 basis points this week to 3.90%. This the highest yield for the 10-year note since Oct. 30, 2008, when it was 3.94%.
The yield on the 30-year Treasury bond rose 19 basis points this week to 4.78%, which is the highest level for the yield since Oct. 18, 2007, when it was also 4.78%.
The weekly average yield to maturity on The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term municipal bond prices finished at 5.27%, even with last week.