Yield (%)

The "Yield" column is a new feature of MunicipalBonds.com's trade and price databases as of April 2003.
Since 2000, MunicipalBonds.com has focused on prices and price spreads. (Please note the Red Flags within our pricing databases and refer to our quarterly and annual Worst Spreads studies.)

But yields are not new to the Muni Markets. In practice, broker/dealers should explain and quote a yield when first offering a bond. So hopefully yields are already understood.

If not, you should know that the yields we list are provided to us by the Municipal Securities Rulemaking Board (MSRB), which collects numbers from broker/dealers as part of the Muni Market's trade reporting program. So to be clear, the yields provided are not our calculations. We list the yield numbers as reported.

The yield figure could be based on one of two different yield calculations:

1. Yield-to-Maturity
2. Yield-to-Call

We advise that you ask your broker and broker/dealer about your yield and have them identify and explain the figure.

Note: Negative Yields
It came as a shock to us when we discovered the existence of negative yields. If you're thinking a negative yield sounds bad you're right. It sounds very bad to us.
When we created the yield column and started researching it, they started popping up. What's worse is that there aren't just a few negative yields, there are thousands.

What does a negative yield mean?
You'll probably hear a lot of definitions from bond dealers, but the simplest explanation is that you're losing money...whatever the principal amount you invested is providing you a negative return. It would be comparable to depositing $10,000 into a one-year bank CD and at the end of the year you would get less than 10,000 back.

Aren't negative yields illegal...or prohibited...or something?
This is something we are asking the SEC, MSRB and NASD.

Note: Defaulted Bonds
There may be examples of Municipal Bonds with very high yields. These may be actual yields on interest bearing securities. But it also could be an example of a defaulted bond that does not bear interest. There shouldn't be a yield figure reported on these types of Municipal Bonds so in theory these yields should be good. But we are checking with the MSRB and requesting verification.