The Bond Buyer’s weekly yield indexes increased this week, driven by two considerably softer sessions.
“There’s a gross imbalance between supply and demand — there is no demand,” said Fred Yosca, head of trading at Bank of New York Mellon. “Tuesday and Wednesday were disastrous. Retail investor demand has run for the hills. With lack of buyer interest, and a good run of supply coming until the holiday, it’s going to be very hard to hold yield levels in here.”
Leading the new-issue market this week, Connecticut priced $736.6 million of taxable Build America Bonds and tax-exempt debt, while the New York City Transitional Finance Authority came to market with $700 million of BABs.
The Philadelphia International Airport came to market with $611.7 million of debt, notable for the fact that the Assured Guaranty Municipal Corp.-backed component of the deal was slashed to $78.3 million from $419.4 million after Standard & Poor’s downgraded Assured Guaranty Ltd. to AA-plus.
The Bond Buyer 20-bond index of 20-year general obligation bond yields increased 12 basis points this week to 3.96%. That is the highest level for the index since Aug. 19, when it was 4.03%.
The 11-bond GO index of higher-grade 20-year GO yields jumped 13 basis points higher this week to 3.71%, which is the highest level for the index since Aug. 19, when it was 3.76%.
The revenue bond index, which measures 30-year revenue bond yields, rose seven basis points this week to 4.67%. That is its highest level since Aug. 19, when it was 4.69%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, gained one basis point this week to 0.51%, which is its highest level since Sept. 1, when it was also 0.51%.
The yield on the 10-year Treasury note increased 12 basis points to 2.67%, its highest level since Sept. 16, when it was 2.76%. The yield on the 30-year Treasury gained nine basis points this week to 4.05%, its highest level since Aug. 5, when it was 4.06%.
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 4.91%, up two basis points from last week’s 4.89%.
