Municipals were little changed Monday as U.S. Treasury yields fell slightly and equities ended mixed.
Munis have held up much better than USTs with recent market volatility, said Jeff Timlin, a partner at Sage Advisory.
Market participants do not usually use munis “to make extremely skilled tactical moves that the [overall] market was doing pre- and post-election,” he said, noting this lends itself to munis being more of a stable asset class during periods such as the past few weeks.
Muni yields fell slightly last week as “investors were active buyers in the primary market and added money to muni mutual funds and [exchange-traded funds],” said Pat Luby, head of municipal strategy at CreditSights.
Fund flows continue to be positive, with muni mutual funds seeing 20 straight weeks of inflows, according to LSEG Lipper.
However, fund flows slowed as investors
Fund flows will remain relatively stable and within a “fairly tight boundary,” Timlin said.
Tax-exempts have outperformed USTs and corporates, pushing muni-UST ratios lower, Luby said.
The two-year municipal to UST ratio Monday was at 62%, the three-year at 61%, the five-year at 62%, the 10-year at 67% and the 30-year at 82%, according to Refinitiv Municipal Market Data’s 3 p.m. EST read. ICE Data Services had the two-year at 62%, the three-year at 61%, the five-year at 61%, the 10-year at 66% and the 30-year at 81% at 4 p.m.
This week, issuance stands at an estimated $8.4 billion, led by $1 billion of United Airlines Terminal Improvement Projects airport system special facilities AMT revenue bonds from non-investment grade rated Houston.
In the primary market Monday, Frost Bank priced for Ector County, Texas, (/AA-/AA-/) $317.555 million of certificates of obligation, Series 2024, with 5s of 2/2026 at 3.06%, 5s of 2029 at 2.96%, 5s of 2034 at 3.30%, 5s of 2039 at 3.67%, 5s of 2044 at 4.01% and 5s of 2050 at 4.21%, callable 2/15/2034.
Jefferies priced for the Conroe Independent School District, Texas, (Aaa/AAA//) $129.355 million of PSF-insured unlimited tax refunding bonds, Series 2024, with 5s of 2/2026 at 2.96%, 5s of 2029 at 2.82%, 5s of 2034 at 3.14% and 5s of 2036 at 3.29%, callable 2/15/2033.
Most issuers try to finish business before the Thanksgiving holiday, “so this week will probably be busy and more active than the two weeks since the election,” Timlin said.
Supply should be “well absorbed” by buyers, said Daryl Clements, a municipal portfolio manager at AllianceBernstein.
There are several other large deals on tap for the remainder of the year.
Connecticut is set to price Dec. 4 $1.38 billion of transportation infrastructure purposes special tax obligation bonds.
Coming on the heels of a trio of upgrades, the
The Dormitory Authority of the State of New York is set to price the week of Dec. 9 around $2.5 billion of new-money and refunding state sales tax revenue bonds.
The Chicago Transit Authority is set to price the week of Dec. 9 $600 million of sales tax receipts revenue bonds.
Hawaii is set to
AAA scales
Refinitiv MMD’s scale was little changed: The one-year was at 2.79% (unch) and 2.65% (+2) in two years. The five-year was at 2.66% (+2), the 10-year at 2.94% (unch) and the 30-year at 3.79% (unch) at 3 p.m.
The ICE AAA yield curve was little changed: 2.91% (unch) in 2025 and 2.68% (+1) in 2026. The five-year was at 2.66% (unch), the 10-year was at 2.94% (unch) and the 30-year was at 3.75% (unch) at 4 p.m.
The S&P Global Market Intelligence municipal curve was cut up to a basis point: The one-year was at 2.84% (unch) in 2025 and 2.66% (+1) in 2026. The five-year was at 2.65% (+1), the 10-year was at 2.94% (+1) and the 30-year yield was at 3.74% (+1) at 4 p.m.
Bloomberg BVAL was unchanged: 2.82% in 2025 and 2.63% in 2026. The five-year at 2.68%, the 10-year at 2.96% and the 30-year at 3.68% at 4 p.m.
Treasuries saw small gains.
The two-year UST was yielding 4.282% (-2), the three-year was at 4.25% (-3), the five-year at 4.276% (-3), the 10-year at 4.415% (-3), the 20-year at 4.710% (-1) and the 30-year at 4.612% (-1) at the close.
Negotiated calendar:
Houston (Ba3//BB-/) is set to price Tuesday $1 billion of United Airlines Terminal Improvement Projects airport system special facilities AMT revenue bonds, Series 2024B, serials 2033-2039. BofA Securities.
The Maricopa Industrial Development Authority (Ba1//BBB-/) is set to price Thursday $520 million of Grand Canyon University Project taxable education revenue bonds, Series 2024. Goldman Sachs.
The Omaha Airport Authority (A1/AA-//) is set to price Wednesday $319.45 million of airport facilities AMT revenue bonds, Series 2024, serials 2025-2044, terms 2049, 2054. BofA Securities.
The Pennsylvania Housing Finance Agency (Aa1/AA+//) is set to price Wednesday $248.56 million of single-family mortgage non-AMT social revenue bonds, Series 2024-147A, serials 2025-2036, terms 2039, 2044, 2049, 2053, 2054. Jefferies.
Austin (Aa3/AA-/AA-/) is set to price Tuesday $245.94 million electric system revenue refunding bonds, Series 2024, serials 2028-2046, terms 2050, 2054. J.P. Morgan.
The Tennessee Housing Development Agency is set to price Wednesday $224.275 million of residential finance program non-AMT social bonds, consisting of $99.265 million of Series 2024-3B and $125.01 million of Series 2024-3C. Raymond James.
The Wisconsin Housing and Economic Development Authority (Aa2/AA+//) is set to price Tuesday $215 million of home ownership non-AMT social revenue bonds, Series 2024C, serials 2025-2036, terms 2039, 2044, 2051, 2055. RBC Capital Markets.
The North Dakota Housing Finance Agency (Aa1///) is set to price Wednesday $195 million of Home Mortgage Finance Program housing finance program non-AMT social bonds, Series 2024D, serials 2026-2036, terms 2039, 2044, 2049, 2052, 2055. RBC Capital Markets.
The East Montgomery County Improvement District, Texas, (/AA//) is set to price Tuesday $165.52 million of sales tax revenue bonds, insured by Assured Guaranty, serials 2027-2054. Raymond James.
Chicago (/A+/A+/AA-) is set to price Tuesday $139.49 million of second lien wastewater transmission revenue refunding bonds, Series 2024B, serials 2026-2028, 2030-2039. Cabrera Capital Markets.
The Cabarrus County Development Corp., North Carolina, (Aa1/AA+/AA+/) is set to price Wednesday $135.655 million of limited obligation bonds, Series 2024B, serials 2025-2044. BofA Securities.
The Public Finance Authority is set to price Tuesday
Garland, Texas, (A1//AA-/) is set to price Wednesday $109.66 million of electric utility system revenue refunding bonds, New Series 2024. Wells Fargo.
Competitive:
The Delaware Transportation Authority (Aaa/AA+//) is set to sell $150.455 million of transportation system senior revenue bonds at 10:30 am eastern Tuesday.
The Santa Barbara Finance Authority, California, (Aa2/AA//) is set to sell $124.222 million of public safety and park project lease revenue bonds at 11:15 am eastern Tuesday.