Municipal Bond Market Healing
Aside from Illinois' new issue, there were encouraging signs last week in the new issue market for traditional municipal bonds.
After a rough start because of increasing tensions in the Middle East, last week ended on a relatively positive note. The credit market bounced Friday and recaptured most of the week's losses.
For the week, Morningstar's Corporate Credit Index only widened 1 basis point to +138. The overseas tensions sent investors to safety, resulting in a decline in interest rates as the 10-year and 30-year Treasury bonds rallied 16 and 18 basis points, respectively. This more than offset the rise in interest rates earlier in the month.
David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.