Municipals have been regular to weaker on the entrance finish of the curve Monday, however little modified out lengthy, as U.S. Treasuries cheapened and equities ended combined.
The 2-year muni-UST ratio Monday was at 65%, the five-year at 63%, the 10-year at 70% and the 30-year at 88%, in keeping with Municipal Market Knowledge’s 3 p.m. EDT learn. ICE Knowledge Companies had the two-year at 65%, the five-year at 63%, the 10-year at 71% and the 30-year at 90% at a 4 p.m. learn.
Muni traders typically have a “optimistic outlook” and the new-issue calendar over the following few weeks will likely be elevated once more, with $12.9 billion coming this week, stated Birch Creek strategists.
“We suspect offers will likely be effectively obtained, however underwriters will seemingly worth in beneficiant concessions, finally posing a problem for additional muni outperformance,” they stated.
Since August, “the lengthy finish has been the primary driver of muni returns as we have now seen the muni curve flatten by 30 foundation factors from 229 foundation factors to 199 foundation factors since Aug. 1 as traders continued to reap the benefits of larger yields earlier than the Fed made any cuts later this yr,” stated Jason Wong, vp of municipals at AmeriVet Securities.
Lengthy-term muni mutual funds have seen round $5.2 billion in inflows because the begin of August, whereas intermediate funds have seen inflows of $2.17 billion, in keeping with LSEG Lipper.
“The entrance finish of the curve is doing a lot of the heavy lifting for the muni market as traders have been in a holding sample as a lot of the market was anticipating financial knowledge that may point out a Fed charge reduce,” Wong stated.
As soon as financial knowledge solidified the percentages of a charge reduce, the lengthy finish rallied by round 38 foundation factors whereas the entrance finish remained comparatively flat from Sept. 2 to Oct. 3, he stated.
Final week, the muni market noticed a “slowdown in exercise” after the asset class noticed its finest month-to-month efficiency in practically two years, stated Birch Creek strategists.
Heading into final week, ratios on the entrance finish have been under 60%, leaving “little to be desired, inflicting the curve to flatten as traders re-allocated to longer period,” they stated.
Muni yields on the entrance finish have been reduce one to 2 foundation factors, whereas the remainder of the curve noticed yields bumped two to 4 foundation factors, Wong stated.
The brand new-issue calendar took a “breather” final week with underneath $8 billion in offers, however “the restricted choices led to sturdy subscriptions on negotiated offers and tight bidding on the aggressive entrance, particularly for different-name excessive grades with just a little further unfold,” Birch Creek strategists stated.
A $374 million Aa3/AA- sewer deal was bumped as much as 12 foundation factors out to 30 years, whereas a $179 million AA- kids’s hospital was bumped 13 foundation factors out lengthy, they stated.
Even the Los Angeles Division of Water and Energy, a credit score that score businesses put
AAA scales
MMD’s scale was unchanged: 2.40% in 2026 and a couple of.32% in 2027. The five-year was 2.32%, the 10-year was 2.91% and the 30-year was 4.21% at 3 p.m.
The ICE AAA yield curve was reduce as much as 4 foundation factors: 2.39% (+4) in 2026 and a couple of.33% (+4) in 2027. The five-year was at 2.35% (+3), the 10-year was at 2.92% (+1) and the 30-year was at 4.23% (unch) at 4 p.m.
The S&P World Market Intelligence municipal curve was little modified: The one-year was at 2.40% (+1) in 2025 and a couple of.31% (+1) in 2026. The five-year was at 2.31% (unch), the 10-year was at 2.91% (unch) and the 30-year yield was at 4.21% (unch) at 3 p.m.
Bloomberg BVAL was little modified: 2.30% (+1) in 2025 and a couple of.26% (unch) in 2026. The five-year at 2.28% (unch), the 10-year at 2.88% (unch) and the 30-year at 4.21% (unch) at 4 p.m.
Treasuries have been weaker.
The 2-year UST was yielding 3.596% (+2), the three-year was at 3.616% (+2), the five-year at 3.745% (+3), the 10-year at 4.163% (+4), the 20-year at 4.725% (+5) and the 30-year at 4.759% (+5) close to the shut.
Major to come back
The Texas Transportation Finance Corp. (Aa1/AA+//) is ready to cost Tuesday $1.739 billion of subordinate tier toll income and refunding bonds, consisting of $1.678 billion of tax-exempt Collection 2025A bonds and $61.2 million of taxable Collection 2025B bonds. BofA Securities.
New York Metropolis (Aa2/AA/AA/AA+/) is ready to cost Wednesday $1.5 billion of GOs, Fiscal 2026 Collection D. J.P. Morgan.
The PeaceHealth Obligated Group (/A-/A+/) is ready to cost Tuesday $787.356 million of taxable bonds. Morgan Stanley.
The San Diego Unified Faculty District is ready to cost Wednesday $670 million of GOs, consisting of $7.355 million of taxable Collection P-1 Election of 2008 bonds (Aa2///), $92.645 million of Collection P-2 Election of 2008 bonds (Aa2//AAA/AAA/), $11.115 million of taxable Collection I-1 Election of 2018 bonds (Aa2///), $25 million of Collection I-2 Election of 2018 bonds (Aa2//AAA/AAA/), $213.885 million of Collection I-3 Election of 2018 bonds (Aa2//AAA/AAA/), $13.825 million of taxable Collection C-1 Election of 2022 bonds (Aa2///), $10 million of Collection C-2 Election of 2022 bonds (Aa2//AAA/AAA/), and $296.175 million of Collection C-3 Election of 2022 bonds (Aa2//AAA/AAA/). Jefferies.
Massachusetts (Aa1/AAA//AAA/) is ready to cost Wednesday $493.2 million of commonwealth transportation fund income and refunding bonds, consisting of $325 million of Collection R bonds and $168.2 million of Collection 2025A bonds. J.P. Morgan.
Columbus, Ohio, (Aaa/AAA/AAA/) is ready to cost Tuesday $470.405 million of varied objective GOs, consisting of $218.69 million of limitless tax bonds, Collection 2025A; $23.23 million of restricted tax bonds, Collection 2025B, $88.545 million of limitless tax refunding bonds, Collection 2025-1; $31.86 million of restricted tax refunding bonds, Collection 2025-2; $48.165 million of taxable limitless tax bonds, Collection 2025C; and $59.915 million of taxable restricted tax bonds, Collection 2025D. RBC Capital Markets.
Albany Capital Useful resource Corp. (A2/A//) is ready to cost Thursday $385.49 million of tax-exempt income refunding bonds (Albany Medical Middle Hospital challenge), Collection 2025A. Jefferies.
The New Jersey Housing and Mortgage Finance Company (/AA-//) is ready to cost Tuesday $371.695 million of social multi-family income bonds, consisting of $123.09 million of non-AMT bonds, Collection 2025A; $220.87 million of non-AMT bonds, Collection 2025B; and $27.735 million of taxable bonds, Collection 2025C. Wells Fargo.
The California Municipal Finance Authority is ready to cost $371.526 million of municipal certificates, Collection 2025-2, consisting of $313.01 million of Class A-1 bonds (/AA-//), $50.156 million of Class A-2 bonds (/BBB//), and $8.36 million of nonrated Class B subordinate bonds. BofA Securities.
The Normal Authority of South Central Pennsylvania (Aa3//AA-/) is ready to cost Tuesday $270.215 million of bonds (WellSpan Well being Obligated Group), consisting of $92.355 million of Collection 2025A bonds and $177.86 million of Collection 2025B bonds. BofA Securities.
The Oklahoma Municipal Energy Authority (/A/A/) is ready to cost Tuesday $248.68 million of energy provide system income and refunding bonds, Collection 2025A. Goldman Sachs.
The South Carolina State Housing Finance and Improvement Authority (Aaa///) is ready to cost Thursday $195 million of non-AMT mortgage income bonds, Collection 2025C. BofA Securities.
Ohio (A3/A//) is ready to cost Thursday $172.815 million of hospital income bonds (College Hospitals Well being System, Inc.), Collection 2025A. BofA Securities.
The Westmoreland County Municipal Authority, Pennsylvania, (/AA//) is ready to cost Tuesday $152.355 million of municipal service income refunding bonds, Collection 2025A. Stifel.
The Roanoke Financial Improvement Authority, Virginia, (Aa3/AA-//) is ready to cost Tuesday $147.95 million of hospital income bonds (Carilion Clinic Obligated group), Collection 2025A. BofA Securities.
The Fontana Public Amenities Financing Authority, California, (/AA-//) is ready to cost Wednesday $135.205 million of lease income bonds, Collection 2025A. Ramirez.
Gadsden, Alabama, (/AA//) is ready to cost Tuesday $127.6 million of GO warrants, Collection 2025A. Stifel.
The Construct NYC Useful resource Corp. (/BB+//) is ready to cost Thursday $121.765 million of income bonds, consisting of $119.765 million of tax-exempt Collection 2025A bonds and $2 million of taxable Collection 2025B bonds. Raymond James.
The South Carolina Jobs and Financial Improvement Authority is ready to cost Thursday $113.385 million of senior residing income bonds (Connexion Communities challenge), consisting of $112.53 million of Collection 2025A1 bonds and $855,000 of Collection 2025A2 bonds. D.A. Davidson.
Larimer County, Colorado, (/AA+//) is ready to cost Tuesday $110 million of certificates of participation, consisting of $80.005 million of tax-exempts, Collection 2025A, and $29.995 million of taxables, Collection 2025B. Piper Sandler.
The Tempe Industrial Improvement Authority, Arizona, is ready to cost Thursday $108.595 million of nonrated income and refunding bonds (Friendship Village of Tempe challenge). Ziegler.
Aggressive
The Maryland Division of Transportation (Aa1/AAA/AA+/) is ready to promote $497.705 million of consolidated transportation refunding bonds, Collection 2025C, at 11 a.m. Japanese Wednesday, and $345 million of consolidated transportation bonds, Collection 2025B, at 10:30 a.m. on Wednesday.
Oklahoma County, Oklahoma, (Aa1///) is ready to promote $215 million of GO restricted tax bonds at 9:30 a.m. Wednesday.
Broward County, Florida, (Aa1/AA+//) is ready to promote $158.845 million of water and sewer utility income refunding bonds at 10:30 a.m. Wednesday.
Jersey Metropolis, New Jersey, (A1///) is ready to promote $124.45 million of normal enchancment bonds at 11 a.m. Tuesday.
Houston is ready to promote $121 million of tax and income notes at 10 a.m. Wednesday.
