The S&P National Municipal Bond Index is the first in a series of targeted S&P U.S. fixed income indexes, the company said.
The new offering is a representative, market value-weighted index designed to measure the performance of the investment-grade U.S. municipal bond market. The index consists of approximately 3,000 bonds, with a total market value of $305.4 billion as of September 4, 2007.
Constituents of the index are derived from Standard & Poor’s/Investortools Municipal Bond Index.
According to a press release, the index consists of a broad-based national index, as well as state level municipal bond sub-indexes. At this time, the state level indexes are the S&P California Municipal Bond Index and S&P New York Municipal Bond Index.
To be eligible for the S&P National Municipal Bond Index, a bond must have a rating of at least BBB- by Standard & Poor’s, Baa3 by Moody’s, or BBB- by Fitch. The bond must be denominated in U.S. dollars and the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or local government or agency such that interest on the bond is exempt from U.S. federal income taxes.
The bond must also have a minimum Par Amount, or amount outstanding, of $50 million to be eligible for inclusion.
On Monday, Barclays Global Investors launched an exchange-traded fund that tracks the new S&P National Municipal Bond Index (see Barclays Launches Municipal Bond ETF).
For more information go to www.standardandpoors.com/indices.