Municipals were slightly firmer in spots Monday as U.S. Treasury yields fell and equities ended mixed.
“Munis have been slow and steady (steady may be a stretch) for the first couple of months of the year,” said Daryl Clements, a portfolio manager at AllianceBernstein.
Munis returned 0.51% in January and 0.38% in February month-to-date, he noted.
“The supply and demand backdrop has been favorable, with $7 billion of inflows into mutual funds and exchange-traded funds — an indication of strong muni demand,” Clements said.
Around 60% of demand has gone into longer-duration strategies, while 40% has gone into higher-yielding strategies, showing investors are apparently more willing to take on a bit more risk, he said.
Last week, “there was no meaningful economic data to digest and yields were slightly lower,” Clements said.
Yields were bumped slightly on the front end but remained largely unchanged on the long end, said Jason Wong, vice president of municipals at AmeriVet Securities.
With yields unchanged for the most part, munis are seeing gains of 0.38% so far this month and year-to-date returns of 0.89%, he said.
“With the continued volatility in the rates markets, munis continue to outperform Treasuries as the muni-to-Treasury continue to fall in the 2-10 range and have lowered by roughly 0.5% percentage points while ratios in the long end have dipped lower by 0.8 percentage points over the past week,” Wong said.
The two-year municipal to UST ratio Monday was at 63%, the five-year at 63%, the 10-year at 67% and the 30-year at 85%, according to Municipal Market Data’s 3 p.m. EST read. ICE Data Services had the two-year at 62%, the five-year at 63%, the 10-year at 66% and the 30-year at 83% at 4 p.m.
This will be a busy week in the primary market with $7.5 billion on the calendar, including “Santee Cooper, NYC Water, several college and university deals and two fairly large non-rated deals,” said Pat Luby, head of municipal strategy at CreditSights.
However, this amount is “relatively average” for this time of year, Clements said.
With March 1 coupon payments “around the corner,” next week’s calendar should be well-digested, he noted.
On tap for next week are at least two mega deals, including New York City with $1.5 billion of GOs and the Regents of the University of California with $1.4 billion of tax-exempt general revenue bonds.
Sizable deals already scheduled for the week of March 10 include the New York City Transitional Finance Authority with $1.5 billion of future tax-secured bonds, California with $825 million of taxable GO and taxable GO refunding bonds and $725 million of Build Illinois sales tax bonds.
The week of March 17 sees several more large deals, including the Dormitory Authority of the State of New York with $2.3 billion of personal income tax revenue bonds, the N.Y. Metropolitan Transportation Authority with $700 million of transportation revenue refunding green bonds and New York State with $500 million of GOs.
AAA scales
MMD’s scale was bumped up to two basis points: The one-year was at 2.60% (-2) and 2.62% (-2) in two years. The five-year was at 2.69% (-2), the 10-year at 2.96% (unch) and the 30-year at 3.97% (unch) at 3 p.m.
The ICE AAA yield curve was bumped up to a basis point: 2.67% (-1) in 2026 and 2.62% (-1) in 2027. The five-year was at 2.71% (-1), the 10-year was at 2.95% (-1) and the 30-year was at 3.89% (unch) at 4 p.m.
The S&P Global Market Intelligence municipal curve saw small bumps: The one-year was at 2.63% (-2) in 2025 and 2.63% (-3) in 2026. The five-year was at 2.72% (-3), the 10-year was at 2.96% (-2) and the 30-year yield was at 3.91% (-2) at 4 p.m.
Bloomberg BVAL was bumped up to a basis point: 2.55% (-1) in 2025 and 2.61% (-1) in 2026. The five-year at 2.70% (-1), the 10-year at 2.95% (-1) and the 30-year at 3.92% (unch) at 4 p.m.
Treasuries were firmer.
The two-year UST was yielding 4.2% (-3), the three-year was at 4.169% (-4), the five-year at 4.229% (-4), the 10-year at 4.394% (-4), the 20-year at 4.684% (-3) and the 30-year at 4.652% (-3) near the close.
Primary to come
The Black Belt Energy Gas District (Baa1/NR/NR/NR/) is set to price $900 million of gas project revenue bonds, 2025 Series B. Goldman Sachs.
The South Carolina Public Service Authority (/A-//) is set to price Tuesday $650 million of revenue bonds. BofA Securities.
The Pennsylvania Turnpike Commission (Aa3///) is set to price Thursday $602.81 million of turnpike revenue bonds. RBC Capital Markets.
The New York City Municipal Water Finance Authority (Aa1/AA+/AA+/) is set to price Wednesday $600 million of water and sewer second general resolution revenue bonds, Fiscal 2025 Series BB, serials 2043-2044, 2048, 2050, 2052-2053, 2055. BofA Securities.
The Bay Area Toll Authority is set to price Tuesday $379.08 million of San Francisco Bay Area toll bridge revenue bonds, consisting of $279.08 million of 2025 Series F-1 (NR/AA/AA/) and $100 million of 2025 Series SSL-1 (NR/AA-/AA-/). Wells Fargo.
Auburn University (Aa2/AA-/NR/NR/) is set to price Wednesday $333.435 million of general fee revenue bonds, consisting of $139.715 million of Series 2025A and $193.72 million of Series 2025B. Jefferies.
The Idaho Housing and Finance Association (Aaa/AA+/NR/NR/) is set to price Wednesday $318.015 transportation expansion and congestion mitigation fund sales tax revenue bonds, Series 2025A, serials 2026-2045, 2050, term 2049. BofA Securities.
The Idaho Housing and Finance Association (Aa1///) is set to price Tuesday $250 million of taxable single-family mortgage bonds, 2025 Series A, serials 2025-2037, terms 2040, 2045, 2049, 2065. RBC Capital Markets.
The Monmouth County Improvement Authority, New Jersey, is set to price Tuesday $237.071 million of non-rated governmental pooled loan project notes, serial 2026. Raymond James.
The Missouri Joint Municipal Electric Utility Commission’s (A2//A/) is set to price Tuesday $200 million of Prairie State Project power project revenue refunding bonds. BofA Securities.
The Carroll City-County Hospital Authority, Georgia, (Aa2/AA//) is set to price Wednesday $175.72 million of Tanner Medical Center project refunding revenue anticipation certificates, serials 2026-2045, terms 2050, 2055. Raymond James.
The Board of Governors of the Colorado State University System is set to price Wednesday $108.74 million of non-rated system enterprise revenue and revenue refunding bonds, Series 2025B, term 2055. Morgan Stanley.
The Massachusetts Development Finance Agency (Aa3/AA-/NR/NR/) is set to price Thursday $100 million of Boston University Issue refunding revenue bonds, Series 2025B-2, terms 2048, 2048. Barclays.
The Industrial Development Authority of the city of Phoenix and Industrial Development Authority of the county of Maricopa (Aa1///) is set to price Wednesday $100 million of non-AMT single-family mortgage revenue bonds, 2025 Series, serials 2027-2037, terms 2040, 2045, 2050, 2055, 2056. Stifel.
Competitive
Oyster Bay, New York, is set to sell $178.275 million of water district notes at 10:45 a.m. eastern Tuesday.
The Fullerton Joint Union High School District, California, (Aa2/AA//) is set to sell $120 million of Election of 2024 GOs, Series A, at noon Tuesday.
Washoe County School District, Nevada, (Aa2/AA//) is set to sell $100 of limited tax GO school improvement bonds at 11:30 a.m. Tuesday.
Maury County, Tennesee, (Aa2///) is set to sell $100 of GOs at 10:30 a.m. Tuesday.
The Virginia Public Building Authority (Aa1/AA+/AA+/) is set to sell $324.06 million of public facilities revenue bonds, Series 2025A, at 10:45 a.m. Wednesday.
The Springfield Board of Public Utilities, Missouri, is set to sell $275.53 million of certificates of participation at noon Wednesday.
Hoboken, New Jersey, is set to sell $172.019 million of bond anticipation notes at 11 a.m. Wednesday.