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Build America Bond yields rose to 11-month highs as the federal program, left out of the tax cut...

Build America Bond yields rose to 11-month highs as the federal program, left out of the tax cut deal, looks set to expire at year's end barring a last-minute save. Zero Hedge says it demonstrates what happens to an asset class "when it becomes clear that the government may not prop it in perpetuity."
Comments (1)
  • Bob Lind
    , contributor
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    Build America bond spreads have actually tightened considerably since the market became aware the program would not be continued. Spreads widened in early November due to heavy supply but have since tightened fairly dramatically. Today, Goldman Sachs priced a $1.8 billion deal for the New Jersey Turnpike Authority. Initial spread talk was +287.5, it was priced +262.5 and is now bid +248, almost 40 basis points tighter than initial spread talk.

     

    Absolute yield levels are higher as a result of the rise in general treasury interest rates, not widening spreads.
    8 Dec 2010, 08:15 PM Reply Like
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