Jessica Lerner

The $180.24 million deal comprises $76.085 million of metropolitan district bonds and $104.155 million of consolidated public improvement bonds.

August's volume reached $49.174 billion in 873 issues, up 25% from 2023. August's total is above the 10-year average of $40.828 billion and is also the highest monthly total this year.

The muni market is "well-positioned for strategic opportunities, with strong inflows driven by the current narrative and eased secondary selling pressure," said James Pruskowski, chief investment officer at 16Rock Asset Management.

The Investment Company Institute reported more than $1.3 billion of inflows into muni mutual funds. The last time inflows topped $1 billion, per ICI data, was for the week ending Feb. 7. LSEG Lipper has reported weeks with $1 billion plus inflows on July 31 and May 8.

ICE's and MarketAxess's networks are "complementary," said Peter Borstelmann, president of ICE Bonds, as the former is "deep and rich" in the retail wealth segment, while the latter is "deep and rich" in the institutional space.

"On the whole, the municipal market continues to provide an attractive entry point for investors," said AllianceBernstein strategists. "And with the Fed clearly communicating that a September rate cut is imminent, the future is bright for the municipal market."

"The forward calendar shows issuance will be above average over the next few weeks, while reinvestment cash is set to drop off," Birch Creek strategists said.

The purpose of restructuring is to help the Pennsylvania hospital operator "avoid a bankruptcy scenario," said Dora Lee of Belle Haven Investments.

Along with the influx of supply, the muni market remains "constructive" due to attractive yields, said Catherine Stienstra, head of municipal bond investments at Columbia Threadneedle Investments.

All eyes are on Jackson Hole and Fed Chairman Jerome Powell's speech this week, noted Cooper Howard, a fixed-income strategist at Charles Schwab.

"Investor reception will remain the ultimate arbiter of muni performance and … the current state of the tax-exempt space to be well-positioned, even though munis are likely to continue to underperform USTs," said Jeff Lipton, a research analyst and market strategist.

Part of the surge in issuance came from issuers tapping the capital market after several years due to the inability to no longer postpone long-delayed projects and the drying up of pandemic aid.

VRDOs may be a "short-term solution" for issuers to refinance when the Fed starts cutting rates, said James Pruskowski, chief investment officer at 16Rock Asset Management.

Municipal bond insurers wrapped $18.592 billion in the first half of 2024, a 19.5% increase from the $15.561 billion insured in the first half of 2023, according to LSEG data.

Underwriting spreads rose to $7.11 in the first half of 2024 from $3.70 in the first half of 2023.

"There's an important 'date certain' the market may overreact to, but by and large, [this] week is looking positive given a lighter new- issue calendar," said AllianceBernstein strategists.

"After a long-period of muni yields not being that attractive relative to corporates, that's starting to shift," Charles Schwab's Cooper Howard said.

The past several trading sessions have seen "crazy volatility," said Jennifer Johnston, director of research of municipal bonds at Franklin Templeton.

Recent events have been a "roundtrip" for rates, starting with the sentiment shifting from slowing inflation to a softening labor market, said James Pruskowski, chief investment officer at 16Rock Asset Management.

This week's new-issue calendar will be "outsized," said Anders S. Persson, Nuveen's chief investment officer for global fixed-income, and Daniel J. Close, Nuveen's head of municipals.