The Bond Buyer’s weekly yield indexes were flat to slightly lower this week as the primary market took center stage with over $9 billion sold, in the most active week of new issuance so far in the new year.
Michael Pietronico, chief executive officer of Miller Tabak Asset Management, said the success of the issuers coming to market this week “really depends on the deal.”
“It has to do with credit quality, with what state the issuer was coming from,” he said. “There was a large deal that did extraordinarily well, [$713 million from the New Jersey Higher Education Student Assistance Authority]. There’s not a lot of Garden State issuance, so this saw huge demand. Some of the other deals were not as fortunate.”
“For the most part, the market is sideways,” Pietronico said. “There’s been some spread compression. But some humongous rally doesn’t seem to be in the cards at this point. A range trade should be expected until something happens to change it, in the economy or something.”
The new-issue market this week was led by a $900 million competitive sale from Pennsylvania, including $604 million of taxable Build America Bonds, alongside $794 million of debt from Chicago and the New Jersey deal.
The Bond Buyer 20-bond index of 20-year general obligation bond yields was unchanged this week at 4.31%. The 11-bond index of higher-grade 20-year GO yields was also unchanged this week at 4.03%.
The revenue bond index, which measures 30-year revenue bond yields, declined three basis points to 4.93%. That is the lowest level for the index since Dec. 17, 2009, when it was 4.92%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined two basis points to an all-time low of 0.43%. The previous low was 0.45% last week. The index began on July 12, 1989.
The yield on the 10-year Treasury note declined nine basis points to 3.74%, which is the lowest it has been since Dec. 17, 2009, when it was 3.49%.
The yield on the 30-year Treasury bond dropped six basis points to 4.63%, but it remained above its 4.61% level from two weeks ago.
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 5.37%, down three basis points from last week’s 5.40%.
