Expert: Doug Ingram - 10/31/2006

Question
Doug,

I have been searching in an effort to determine large disparity in muni bond rates between Bloomberg and Bond Buyer the two leading sources of this information.  In my business we often index to muni bond rates to determine our pricing on tax exempt transactions.  Over the past few weeks I have noticed that the rates presented by Bond Buyer are much lower in some instances 10 - 15 bps then those or similar rates in Bloomberg.  For example on 10/31/2006 Bond Buyer lists an A rated 5 year bond at 3.68 and a 10 year A rated bond at 3.94.  Bloomberg lists the same bond rates at 3.92 (5 year) and 4.13 (10 year).  Any insight or a direction as to why this is occurring would be great.  In this highly competitive market transaction can often be lost by 1 - 4 bps.

Regards,

Thomas

Answer
I don't trade Munis, but the best way to check this would be to know the spreads to Treasury rates.  I see these disparities all the time in various data sources.  You can go to 6 or 7 different sites without any matching data for something as simple as advances and declines on stocks.
Unless they are quoting tax affected yields due to TEFRA, it's hard to see why there would be a difference.
When I see this, I go back and compare live offerings to see which of the two more closely reflects the market.
If you keep up with spreads, then all you need to know is the Treasury market, which is much tighter and easier to find.
Bloomberg should also have pages of spreads.
For instance, we use AGGVNT5 index HP to see where Agency bullets should price to the BBT page.
Let me know if I can help you find this, but I'd have to do a little searching.