As of mid May 2014, the S&P Municipal Bond Index has returned 5.91% as the supply demand imbalance continues. New issue supply remains comparatively low to relative to past years and munis have been enjoying a flight to quality halo despite the weaknesses shown by Detroit and Puerto Rico. The S&P 20 Year High Grade Index has erased its 2013 losses and has returned over 13.9% year to date.
Puerto Rico General Obligations tracked in the S&P Municipal Bond Puerto Rico General Obligation Index have rebounded positively in 2014 but may have peaked in recent days as the market has shown little indication of continued forward progress. The weighted average yield of the index has been hovering around 7.67% and 7.73% for the month to date without a major move in either direction. The Puerto Rico bond market has a long way to go to offset it’s 2013 losses of over 20%.
Source: S&P Dow Jones Indices, LLC. Data as of May 15, 2014.