Munis firmer as $922M Miami-Dade County deal prices

Bonds

Municipals were firmer in secondary trading Tuesday as the primary market picked up steam, while U.S. Treasury yields fell and equities ended up.

The two-year muni-to-Treasury ratio Tuesday was at 65%, the three-year at 66%, the five-year at 68%, the 10-year at 67% and the 30-year at 84%, according to Refinitiv Municipal Market Data’s 3 p.m. EST read. ICE Data Services had the two-year at 65%, the three-year at 66%, the five-year at 67%, the 10-year at 66% and the 30-year at 82% at 3:30 p.m.

Munis and taxables rallied last week, due to June’s consumer price index report and the “related better odds” for a Federal Reserve rate cut in September, said Matt Fabian, a partner at Municipal Market Analytics.

However, the rally did “not go far enough, away from the very front of the curve,” he said.

Shorter maturities — which would see the most direct benefit from Fed rate cuts — are now reading “overbought” and should be considered for purchase “only carefully,” Fabian said.

Compared to these short maturities, the rest of the curve is “very or exceptionally oversold: a good near-term total return opportunity for buyers,” he noted.

August’s tax-exempt reinvestment is close to $40 billion, which would be the largest month of 2024 and a jump from July’s “considerable total,” he said.

“For retail investors, reasonable income availability is encouraging principal redeployment back into municipals; with nearly 300,000 trades recorded, last week saw solid SMA buying,” Fabian said.

Mutual fund flows have been “inconsistent” lately, but inflows into exchange-traded funds may “signal investors keeping cash warm while waiting to find a more permanent tax-exempt allocation,” he said. 

“Overall, dealers have shown some optimism in allowing inventory balances to grow this summer, enabling some unloading at the start of July when the primary was softer,” he said.

Issuance this week rises to an estimated $10.7 billion.

In the primary market Tuesday, Barclays priced for Miami-Dade County, Florida, (/A+/A+/AA-/) $921.86 million of aviation revenue refunding bonds. The first tranche, $781.32 million of AMT bonds Series A, saw 5s of 10/2027 at 3.65%, 5s of 2029 at 3.67%, 5s of 2034 at 3.85% and 5s of 2036 at 3.90%, callable 10/1/2034.

The second tranche, $140.54 million of non-AMT bonds, Series B, saw 5s of 10/2025 at 3.03%, 5s of 2029 at 2.97%, 5s of 2034 at 3.13% and 5s of 2037 at 3.25%, callable 10/1/2034.

BofA Securities priced for the Hospital Authority of Hall County and the City of Gainesville, Georgia, (/A/A/) $248.105 million of Northeast Georgia Health System Project revenue anticipation certificates, Series 2024, with 5s of 10/2030 at 3.27% and 5s of 10/2034 at 3.33%, noncall.

Piper Sandler priced for Phoenix (Aa1/AA+/AAA/) $233.385 million of various purpose GOs. The first tranche, $128.2 million of tax-exempts, Series 2024A, saw 5s of 7/2032 at 2.95%, 3s of 2034 at par, 5s of 2034 at 3.00%, 5s of 2039 at 3.24%, 5s of 2044 at 3.60% and 5s of 2047 at 3.79%, callable 7/1/2034.

Pricing details for the second tranche, $105.185 million of taxables, Series 2024B, were unavailable as of 3:30 p.m.

Wells Fargo priced for Portland, Oregon, (Aa2/AA//) $154.635 million of second lien water system revenue refunding bonds, 2024 Series A, with 5s of 5/2025 at 2.98%, 5s of 2029 at 2.83%, 5s of 2034 at 3.00% and 5s of 2039 at 3.18%, callable 5/1/2034.

Volume is predicted to continue at “robust levels,” possibly through the fourth quarter, Fabian said.

However, the “jump up in supply this week … and the strong forward calendar overall should not be troubling for sector performance, especially if positive fund flows can steady themselves and with non-SMA maturities and structures,” he said.

AAA scales
Refinitiv MMD’s scale was bumped two basis points: The one-year was at 2.90% (-2) and 2.88% (-2) in two years. The five-year was at 2.77% (-2), the 10-year at 2.78% (-2) and the 30-year at 3.66% (-2) at 3 p.m.

The ICE AAA yield curve saw bumps: 2.94% (-7) in 2025 and 2.90% (-4) in 2026. The five-year was at 2.76% (-2), the 10-year was at 2.79% (-1) and the 30-year was at 3.64% (-2) at 3:30 p.m.

The S&P Global Market Intelligence municipal curve was bumped one basis point: The one-year was at 2.98% (-1) in 2025 and 2.94% (-1) in 2026. The five-year was at 2.79% (-1), the 10-year was at 2.79% (-1) and the 30-year yield was at 3.64% (-1) at 3 p.m.

Bloomberg BVAL bumped one to two basis points: 2.95% (-2) in 2025 and 2.89% (-2) in 2026. The five-year at 2.80% (-1), the 10-year at 2.78% (-2) and the 30-year at 3.67% (-2) at 3:30 p.m.

Treasuries were firmer.

The two-year UST was yielding 4.433% (-2), the three-year was at 4.205% (-3), the five-year at 4.085% (-4), the 10-year at 4.166% (-6), the 20-year at 4.480% (-7) and the 30-year at 4.377% (-8) at 3:30 p.m.

Primary to come
The New York City Transitional Finance Authority (Aa1/AAA/AAA/) is set to price Wednesday $2.112 million of future tax secured subordinate bonds, consisting of $1.791 billion of tax-exempts, Fiscal 2025 Series A, Subseries A-1, serials 2025-204; $125.87 million of taxables, Fiscal 2025 Series A, Subseries A-2, serials 2025-2026; $119.15 of tax-exempts, Fiscal 2025 Series B, Subseries B-1, serials 2024-2025, 2031-2038; and $75.525 of taxables, Fiscal 2025 Series B, serials 2025-2031. Ramirez.

The Regents of the University of California (Aa2/AA/AA/) is set to price Wednesday $1.327 billion of general revenue bonds, consisting of $821.125 million of Series BW, serials 2025-2041, 2054, and $505.925 million of Series BX, serials 2026, 2029, 2031. RBC Capital Markets.

The San Francisco Public Utilities Commission (Aa2/AA//) is set to price Thursday $634.115 million of wastewater revenue bonds, consisting of $547.835 million of green SSIP bonds, 2024 Series C and $86.28 million of non-SSIP bonds 2024 Series D. Morgan Stanley.

The commission is set to price Wednesday $518.165 million of taxable wastewater revenue bonds, consisting of $432.325 million of green SSIP bonds (Aa2///) 2024 Series A serials 2027 and $85.84 million of non-SSIP bonds (Aa2/AA//), 2024 Series B, serials 2027-2028, 2032-2037. BofA Securities.

The Lamar Consolidated Independent School District, Texas, (Aaa/AAA//) is set to price Wednesday $347.785 million of PSF-insured unlimited tax schoolhouse and refunding bonds, Series 2024, serials 2025-2059. Raymond James.

The Ohio Housing Finance Agency (Aaa///) is set to price Wednesday $275 million of social non-AMT mortgage-backed securities program residential mortgage revenue bonds2024 Series B. J.P. Morgan.

The Maryland Economic Development Corp. (/AA//) is set to price Thursday $148.435 million of Assured Guaranty-insured University of Maryland College Park-Leonardtown Project student housing revenue bonds, Series 2024, serials 2028-2034, terms 2044, 2054, 2059, 2064. RBC Capital Markets.

The Dormitory Authority of the State of New York (Baa3/BBB-//) is set to price Wednesday $144.075 million of Pace University revenue bonds, Series 2024A, serials 2027-2056. BofA Securities.

The California Municipal Finance Authority (/A//) is set to price Wednesday $131.795 million of Saint Ignatius College Preparatory revenue bonds, serials 2028-2044, terms 2049, 2054. Oppenheimer.

The Winchester Economic Development Authority, Virginia, (A1/A+//) is set to price Wednesday $131.22 million of fixed mode Valley Health System Obligated Group refunding revenue bonds, Series 2024A. RBC Capital Markets.

The Ascension Parish-Wide School District, Louisiana, (/AA///) is set to price Thursday $110 million of GO school bonds, Series 2024, serials 2025-2044. D.A. Davidson.

Carmel, Indiana, is set to price Thursday $107.765 million of waterworks refunding revenue bonds, consisting of $56.82 million of Series SERB, serials 2025-2049, and $50.945 million of Series SERC, serials 2025-2053. Stifel.

Competitive
Memphis, Tennessee, (Aa2/AA//) is set to sell $136.56 million of general improvement bonds, Series 2024A, at 10:30 a.m. Eastern Wednesday.

Rochester, New York, is set to sell $134.061 million of bond anticipation notes, 2024 Series III, at 11 a.m. Eastern Wednesday.

Irving, Texas, (Aaa/AAA/) is set to sell $122.04 million of GOs, Series 2024, at 12 p.m. Eastern Wednesday.

Layla Kennington contributed to this article.

Articles You May Like

KBRA places Chicago on watch for downgrade
Caligan picks up a stake in Verona Pharma, seeing an opportunity to generate more value
Bitcoin could end year at $58K as futures market ‘overheated’ — CryptoQuant
Ex-Pimco, Millennium execs set up crypto advisory business
Wall Street bankers on course for up to 35% bonus bump