The Bond Buyer 40

The Bond Buyer - - Front Page -

Top rated muni yields dropped five ba­sis points for the sec­ond day in a row, as vol­ume and mar­ket par­tic­i­pants were scarce.


The yield on the 10- year bench­mark muni gen­eral obli­ga­tion was five ba­sis points lower Wed­nes­day to 2.02% from 2.07% on Tues­day, while the 30- year GO de­creased five ba­sis points to 2.58% from 2.63%, ac­cord­ing to a fi­nal read of MMD’s triple- A scale.

U. S. Trea­suries were mostly stronger at Wed­nes­day’s close.

The yield on the two- year Trea­sury was steady at 1.90%, the 10- year Trea­sury yield de­creased to 2.41% from 2.46% and the yield on the 30year Trea­sury fell to 2.75% from 2.81%.

The 10-year muni- to- Trea­sury ra­tio was cal­cu­lated at 83.7% com­pared with 83.8% on Tues­day, while the 30- year muni- to- Trea­sury ra­tio stood at 94.0% ver­sus 93.3%, ac­cord­ing to MMD.

The MBIS mu­nic­i­pal non-callable 5% GO bench­mark scale was stronger in trad­ing through the mar­ket close on Wed­nes­day.

The 10-year muni bench­mark yield dipped to 2.310% from Tues­day’s fi­nal read of 2.343%, ac­cord­ing to Mu­nic­i­pal Bond In­for­ma­tion Ser­vices.

The MBIS 30- year bench­mark muni yield dropped to 2.788% from 2.819%.

The MBIS bench­mark in­dex, which is com­prised of in­vest­ment- grade mu­nic­i­pal se­cu­ri­ties, is up­dated hourly on the Bond Buyer Data Work­sta­tion.


The pri­mary mar­ket will con­tinue to go through the mo­tions with lit­tle ac­tion and even fewer par­tic­i­pants around un­til early Jan­uary.

Gen­eral obli­ga­tion bonds took a hit from re­cent bank­rupt­cies and are no longer con­sid­ered bul­let­proof.

So some in­vestors now pre­fer buy­ing rev­enue bonds.

“The ma­jor­ity of our funds are rev­enue bonds, but I think GOs have been mis­priced in the muni mar­ket for a long time,” said one port­fo­lio man­ager.

“You get a wider, more se­cure value with rev­enue bonds,” he said.

“In the stressed GOs you have seen some sec­ond guess­ing, but the stronger- credit names you don’t sec­ond guess.”


As of Dec. 26, is­suers sold $ 159.93 bil­lion of GO bonds year- to- date, down from $ 178.81 bil­lion in 2016. Is­suers brought $ 249.39 bil­lion of rev­enue bonds, com­pared with $ 265.99 bil­lion last year. Tax­able is­suance this year has risen to $ 33.99 bil­lion from $ 29.92 bil­lion in 2016.


The Bond Buyer’s 30-day vis­i­ble sup­ply cal­en­dar in­creased $ 28.7 mil­lion to $ 3.15 bil­lion on Thurs­day. The to­tal is com­prised of $ 1.28 bil­lion of com­pet­i­tive sales and $1.87 bil­lion of ne­go­ti­ated deals.

Data ap­pear­ing in this ar­ti­cle from Mu­nic­i­pal Bond In­for­ma­tion Ser­vices, in­clud­ing the MBIS mu­nic­i­pal bond in­dex, is avail­able on The Bond Buyer Data Work­sta­tion.

Con­tact Vanessa Kim at 212- 8038474 for more in­for­ma­tion.

Aaron Weitz­man

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