Finance

The deal announced by Mayor John Whitmire last week would end an eight-year-long impasse with the firefighters union and require $650 million of judgment bonds.

Despite several larger deals entering the primary, the vast amount of cash on hand has not allowed munis to cheapen amid UST volatility and ultra-rich ratios

Laws banning banks from underwriting municipal bond deals because of their fossil fuel or firearm policies dramatically boosted underwriting spreads, a business group's study said.

The New York MTA has not sold fixed-rate transportation revenue bonds since February 2021. The first maturity of that deal (4% 11/15/44) priced at +81 and was evaluated at +78 as of Wednesday by BVAL, according to CreditSights strategists. The same maturity but with a 5% coupon was priced at +59 to BVAL.

Marc Livolsi was promoted to lead U.S. Public Finance New Issue Marketing and Business Development, and Evan Boulukos will lead Assured's Secondary Markets desk, both of whom will report to Chris Chafizadeh, senior managing director and co-head of Public Finance.

"While rate volatility returned this week, should the market return to range-bound levels for a protracted period of time, investors might want to add exposure to sectors that provide the most value and have underperformed thus far," Barclays said. 

Inflows continued for the third consecutive week as LSEG Lipper report fund inflows of $295.5 million for the week ending Wednesday with high-yield hitting the 10th consecutive week of positive flows.

BofA Securities is the latest firm to scoop up former employees from Citi, which decided to shutter its muni division late last year.

The Investment Company Institute reported larger inflows into municipal bond mutual funds for the week ending March 6, with investors adding $956 million to funds following $57 million the week prior.

Narens' hiring complements Stifel's public finance practice and the types of deals the firm is doing, said Betsy Kiehn, managing director and head of Stifel's Municipal Capital Markets Group.

"The muni AAA [high grade] curve has been relatively steady thus far in March, but lags relative to the broader fixed income market after sizable muni outperformance in February," said J.P. Morgan strategists. 

Taxable munis have returned 1.48% month to date and 0.29% year-to-date while investment-grade munis have seen 0.44% returns so far in March and 0.05% year-to-date. USTs are in the black at 1.43% so far this month but returning -1.76% year-to-date while corporate bonds are returning 1.24% in March but -0.46% year-to-date.

Issuers have increased their debt sale in recent weeks, as issuance has come in above $70 billion year-to-date, according to LSEG data

Market participants said it is yet to be seen whether issuers will pull back their BABs refundings due to concerns after several bondholders sent a letter to the trustee on a Regents of the University of California deal, saying it was "prohibited" from executing the redemption.

High-yield and taxable munis continue to outperform, supply grows but concentrates in larger deals led by $3 billion of state personal income tax revenue bonds from the Dormitory Authority of the State of New York next week.

The market is being led more by supply and demand than ratios or even rates. As ratios sit at extremely tight levels, there are buyers engaging at these levels, but large amounts of cash continue to sit on the sidelines.

Costanzo is only the fourth woman to lead a municipal banking division. Huntington has hired Citi's entire Midwest public finance banking group, and Costanzo said the firm intends to further grow its footprint in the municipal space.

Cabrera Capital Markets is welcoming three new public finance hires who are joining the firm from UBS: Shawn Dralle, Shawnell Holman and Chris Bergstrom.

It was a good day for munis with larger deals clearing the primary and secondary trading showing a more constructive tone with triple-A yields falling a few basis points amid a stronger session for all markets.

Harvard and Princeton coming to market is a "huge sign of confidence," said Clare Pickering, a Barclays strategist.