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Municipal Bonds

Research & Resources – Weekly Market Commentary

December in October: The Muni Market Appears to Have Already Entered Its Year-End Phase

October 30, 2009

  • Yields on high-grade muni benchmarks have increased but not as much as muni yields generally.
  • Not only have credit spreads widened, but there is a very substantial “new issue penalty,” as well as a size penalty in the secondary market.
  • The causes are numerous, including the virtual shutting down of trading positions on the street much earlier than usual this year, the perception that the market had gotten ahead of itself, smaller flows into muni funds, skepticism about the direction of Treasury yields, and a spate of long-term new issues during which BABs took over most of the long end.
  • For more, please read the full report below.

Read the Full Report (PDF)



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