Most of The Bond Buyer’s weekly yield indexes increased this week as municipals came out of the holiday doldrums with losses outweighing gains, but with buyers returning to the market.
“The market has a real decent tone to it,” said Evan Rourke, portfolio manager at Eaton Vance. “The feeling is that cash is out there. It’s not a grab-fest, but there’s a bid for everything at some price.”
“We have a decent tone on the long end. There seems to be interest out there,” he said. “Activity started to pick up Tuesday and into yesterday with the first deals of the new year. At year-end, nobody wanted to do too much. This afternoon, it started to slow down again, though, with nonfarm payrolls coming up tomorrow.”
Leading the new-issue market this week was a $3.47 billion taxable general obligation sale for Illinois, and $858.7 million of debt for the New Jersey Transportation Trust Fund Authority in two series, including $500 million of taxable Build America Bonds.
The Bond Buyer 20-bond index of 20-year GO yields rose six basis points this week to 4.31%. That is the highest level for the index since Nov. 24, 2009, when it was 4.33%.
The 11-bond index of higher-grade 20-year GO yields also increased six basis points this week, to 4.03%, which is the highest it has been since Nov. 24, 2009, when it was 4.06%.
The revenue bond index, which measures 30-year revenue bond yields, gained one basis point this week to 4.96%.
That is the highest level for the index since Dec. 3, 2009, when it was 4.98%.
The indexes rose as the yield on the 10-year Treasury note rose four basis points this week to 3.83%, which is the highest since June 18, 2009, when it was 3.85%.
The yield on the 30-year Treasury bond jumped eight basis points this week to 4.69%. This is the highest since June 11, 2009, when it was 4.70%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined four basis points this week to an all-time low of 0.45%. The previous low was 0.46% on Dec. 16, 2009. The index began on July 12, 1989.
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 5.40%, down one basis point from last week’s 5.41%.
