Airport Muni Bonds Rally as Vaccines Herald Travel Rebound
- Yields surged amid pandemic as investors dumped hard-hit bonds
- Turnaround eliminates a rare bargain sector in pricey market
This article is for subscribers only.
Bonds backed by America’s airports are rallying back as the Covid vaccine rollout promises to revive the travel industry, marking a rebound for one of the corners of the municipal-debt market hardest hit by the pandemic.
The rally has driven the yields on debt backed by airports down to about 1.2%, or about 30 basis points more than the market’s benchmark, according to an ICE Bank of America index tracking the sector. That marks a dramatic shift from early in the pandemic, when speculation about the deep financial toll of the nation’s shutdowns drove the index’s yield to more than 4% as investors dumped the securities in droves.