Making Rent
“I view each muni bond that I own as an apartment,” said Kuhn, a co-founder of IBP Insurance Services, an employee- benefits consulting firm. “It just pays me every day, every month, every year. If I invest my money prudently and if I can get 6 percent or 7 percent year in and year out, I’m good and I don’t have to worry.”
In the broader market, states and municipalities plan to offer $5.5 billion of long-term debt next week, led by a $758 million New York State Urban Development Corp. personal income- tax revenue deal, according to data compiled by Bloomberg.
At 3.14 percent, yields on benchmark 10-year munis are at the highest level since April 2011. The interest rate compares with about 3 percent for similar-maturity Treasuries.
The ratio of the yields, a measure of relative value, was about 105 percent yesterday, compared with a five-year average of 101 percent. The higher the figure, the cheaper munis are compared with U.S. government debt.