Big Bad Bond Index Rises 2 Points, Lead By Verizon (VZ)

(February 23, 2012) The Big Bad Bond Index (BBBI), which tracks high grade corporate bonds, slightly rose closing at  1,148.40.  This means the average bond in the index was trading at $1,148.40 based on the last trade of the day. Seventeen bonds ended higher and 12 lower. The average yield fell 0.1% to 2.24%. Seventeen bonds ended higher, and 12 ended lower on day.

The biggest gainer on the day was Verizon’s (VZ) 8.75% coupon bond maturing 11/2018 which gained almost $17 per $1000 face value bond. Other large gainers included bonds from Home Depot (HD) and Merck (MRK). What is interesting in the case of Merck is that the stock had a bad day. Recently, the company announced that its CEO Bill Weldon would be stepping down.

The biggest loser of the day was Alcoa (AA). Its 5.4% coupon bond maturing 4/2021 lost almost $18 on day. The other major loser was a bond from Coca-cola (KO). Recently, its main competitor Pepsi announced it would be launching a mid-calorie soda.

The 10 year treasury lost 0.02% closing at 1.98%. The 10 year treasury and BBBI showed similar performance.

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