Finance

What's happening to the muni market is the "confluence of modest selling (via fund outflows and retail perhaps pausing during tax season); a heavy new issue calendar; and very thin near-term reinvestment expectations," said Matt Fabian, a partner at Municipal Market Analytics.

Colleges and universities have already begun hiring freezes and spending cuts, dialing back research and rescinding offers to Ph.D. candidates, the rating agency said.

Lighter supply, at an estimated $7.9 billion, and still-attractive valuations should allow for solid muni performance this week, said J.P. Morgan strategists.

An Oklahoma agency is borrowing $1.15 billion through an unrated tax-exempt Public Finance Authority bond deal to build and equip a tire factory backed by Finnish interests.

Municipal bond issuance for the week of March 24 is at $7.923 billion, with $6.673 billion of negotiated deals and $1.251 billion of competitive deals on tap.

The Los Angeles-based fund manager has expanded into debt financing to offer affordable housing developer clients a lower cost of capital.

Separately managed accounts have exploded in the muni market in recent years but high-yield SMAs remain rare.

The rating agency cited a tax cut package enacted by the state last year and uncertainty over federal policies for the outlook revision to stable from positive.

Most of Thursday's issuance came from competitive deals, the largest being the Dormitory Authority of the State of New York with $2 billion-plus and California with $889 billion.

Wednesday marked the first trading session that saw cuts more than a basis point or two in spots since last week's extended selloff.