Municipal Bond Regulator Seeks to Provide Debt Indexes to Public

The regulator of the $3.7 trillion U.S. municipal bond market is moving to make indexes publicly available so investors can more easily gauge the prices of securities.

The Municipal Securities Rulemaking Board, which crafts rules for the state and local government bond market, said it plans to provide benchmark yields available on its website that reports securities trades. Such indexes are now available through fee-based services, such as Bloomberg LP and Thomson Reuters Corp.

The benchmarks would improve the ability of individual investors to determine the fairness of prices. Many of the bonds trade infrequently because they’re sold by small governments that don’t borrow often. Nearly half of all municipal bonds are held by households, according to Federal Reserve data.

The board said today it is working with companies that produce such indexes and may be able to make so-called yield curves -- which show the difference in yields between bonds based on how long until the debt is repaid -- within the next three months.

“It’s all about transparency and trying to provide the investor community and the issuer community with more and more data,” Jay Goldstone, the chairman of the Alexandria, Virginia- based board, said today on a conference call with reporters.

To contact the reporter on this story: William Selway in Washington at wselway@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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