Wealthy U.S. investors may be able to buy municipal bonds at some of the highest yields in seven months as issuers rush to borrow before year end.
Yields on the second-highest-rated municipal debt were at levels not reached since May, according to a Bloomberg Fair Market Value index as of Dec. 6.
The Bloomberg said tax-free securities declined 2.29% last month. That was the third straight monthly drop, which hasn’t happened since 2004.
“There will be opportunities for astute investors to buy good quality bonds at lower prices,” Randy Beeman, managing director of Robert W. Baird & Co.’s The Wise Investor Group, told Bloomberg.
Munis of all maturities are “relatively cheap” right now, with yields in short-to-intermediate term securities particularly high compared with Treasuries, according to fixed- income strategists at New York-based JPMorgan Chase & Co. in a report dated Nov. 19. The bank’s analysts raised their recommendation on tax-exempt munis to “cautiously positive” from “neutral.” Bond yields rise as prices fall.