Finance

This week's $9.4 billion calendar "should easily be absorbed as it is set to be the last full primary calendar of the year, given the Fed meeting the following week and then Christmas and New Year's holidays," Birch Creek Capital strategists said in a weekly report.

The City Colleges of Chicago is planning to issue $201 million in unlimited tax GO refunding bonds, bolstered by an upgrade and a new positive rating outlook.

Moody's Investors Service revised its outlook to positive from stable and affirmed its Aa1 issuer and general obligation unlimited tax bond ratings on the city.

Moody's, which last rated the state triple-A in 1979, pointed to an economy that's "poised for diversification and growth."

Pennsylvania leads the new-issue calendar with $2.1 billion of GOs in four series via the competitive market while the New York City TFA will bring another $1.4 billion of exempts and taxables.

Anne Marie Pippin, associate director in the Federal Housing Finance Agency's Office of Financial Technology, weighs the forces shaping the industry's future.

Triple-A yields have fallen up to 95 basis points on the month, supply is up 7.8% year-over-year for November and the month is posting positive returns, which has, in turn, led to well over 3.50% returns year-to-date.

The continued drop in yields has been "buoyed by a broad rate rally and intra-market fundamentals that simply have created more buyers than sellers," noted Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

The outlook revision from negative comes as the school system prepares to tap more of its record $2.44 billion of voter-approved bond authorization next year.

While the muni market faces some headwinds, such as rich relative yields, near-term returns "are likely to be favorable for munis," said Cooper Howard, a fixed-income strategist at Charles Schwab.

The city has made some important progress on the expenditure side, but the new mayor's first budget didn't make similar strides on revenues, according to Fitch.

The BSBY interest rate benchmark was originally envisioned as a successor to the once-ubiquitous Libor rate. But it failed to gain much traction, and Bloomberg now plans to shut it down next year.

"The November muni rally continues as month-to-date returns are now at 4.68%, pushing us further into positive territory for the year as year-to-date returns now stand at 2.35%," said Jason Wong, vice president of municipals at AmeriVet Securities.

"The market has had a solid tone to it recently even with the strong rally seen this month," Roberto Roffo, managing director and portfolio manager at SWBC Investment Management, said of the Nov. 10 rally where municipal yields in 10 years fell by as much as 40 basis points.

There had been speculation of layoffs in Citi's municipal division as several high-profile employees had been departing the firm over the last year, but sources said they have not heard of any muni layoffs.

Final responses are due by Dec. 8 from muni underwriters who want to be on Wisconsin sale syndicates.

The large drop in yields since the end of October can be reflected in sentiment that investors expect a potentially dovish Fed next year, and that a soft landing narrative gives them "permission to finally purchase the bonds they've been admiring," said MMA's Matt Fabian.

This year has seen an increase in and an earlier start to tax loss harvesting amid rapidly rising interest rates and stronger equity market performance.

The rally in munis over the last three weeks has "pushed ratios to levels that we have not seen since the start of the year," said Jason Wong, vice president of municipals at AmeriVet Securities.

Tradeweb created a model that examines outstanding municipal securities, both tax-exempts and taxables, and it looks for similarities in bond features, such as maturities, call dates, use of proceeds and coupon structures.