Christine Albano

Even with the news that New York City is looking to potentially borrow $7B through its Transitional Finance Authority as it faces $9B in lower revenues, the market didn’t blink and TFAs traded firmer.

Taxable equivalent yields on exempts are close to converging into taxables.

Municipal to U.S. Treasury ratios were attractive, especially on the short end, which drove secondary yields lower.

The front of the municipal yield curve is 'astounding' and traders said dealers are uncharacteristically accepting the levels, likely due to the historically attractive ratios.

Uncertainty and volatility have caused a bifurcated market when it comes to credit, and widespread disparity between high-quality and high-yield is complicating matters for issuers.

Yields on all triple-A benchmark curves out to nine years are now below 1%. The largest bumps were again on the very short end of the curve. Lipper reported $580 million of inflows.

Investors are sending the message that higher-grade, longer-term issuers will fare far better than lower-rated, higher-yield ones amid a focus on credit.

The Fed on Monday essentially said it was standing 10 feet back from the market, allowing it to manage the pandemic-driven crisis itself. Lower-rated issuers may benefit most from the facility.

High-grade trading Friday showed the disparate credit picture that investors are facing; they now need to dig deeper into municipal financials and the backstops on certain bonds.

Two credits struggling with coronavirus-driven revenue shortfalls experienced very different outcomes in Tuesday's market. Taxable Penn State bonds showed the appetite for taxable munis is real.

A range of technical issues — from month-end accounting and financing to spread widening, price volatility and the coronavirus impact on businesses and the economy — spurred a tone of relative quiet in Thursday's trade.

Issuers bringing taxable deals this week should see robust buying interest as the strong performance of the corporate market has pushed yields down, making double-A taxable municipal bond yields attractive for corporate investors in the 21% tax bracket.

The municipal market kept with a cautious tone on Thursday as the new-issue market continues to digest deals.

The municipal market saw a plethora of deals come in while secondary market trading showed some weakness on AAA benchmarks.

Secondary market trading showed yields rising slightly, but the primary market again showed signs of life, as demand for the asset class seems to be gaining ground.

A stratified credit differentiation can be expected to linger for the foreseeable future until revenue streams in sales-tax and other project-backed bonds are more fully restored. Pension obligation bonds are back in California.

While many new-issues are still on the day-to-day calendar for next week, more are being slated to price on specific days, signaling that dealers and issuers are ready to again test the primary.

The coronavirus has shaken the foundation of the municipal market and participants are looking cautiously to the Fed while attempting to adjust to the sustained volatility.

Technical and fundamental concerns surrounding credit and supply could present challenges for the market going forward but participants tepidly welcomed signs of stability.

He served a third of his career as a senior managing director of Citi’s Institutional Clients Group, a role from which he retired in June 2019.