Finance

Investors will be greeted Monday with a new-issue calendar estimated at $847 million.

A California treasurer's conduit approved a $135 million bond-funded grant for Loma Linda University Children's Hospital.

On the buy side, lower interest rates and an extreme imbalance between supply and demand is supporting the municipal market's positive tone, according to JB Golden, executive director and portfolio manager at Advisors Asset Management.

UBS' move this week to cut some banking positions marked a reversal of its five-year growth trend as the bank rebooted its municipal underwriting business.

Inflows continued with the Investment Company Institute reporting investors added $2.083 billion to mutual funds in the week ending Jan. 18, after $1.982 billion of inflows the previous week.

The 2023 "January effect" seems to be "displaying typical behavior given relatively thin issuance this month and demand patterns that have been buoyed by four of six reinvestment needs," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

The Federal Reserve's quantitative-tightening program risks being propelled toward an early end as U.S. politicians bicker in Washington over raising the national debt limit, according to some economists and bond market participants.

For the first time in several weeks, munis last week outperformed "by a wide margin and across the entirety of the yield curve," said Eric Kazatsky, head of municipal strategy at Bloomberg Intelligence.

Investors will be greeted Monday with a new-issue calendar estimated at $5.520 billion.

The primary "pumped new life into an already-firm market with a lower yield range being established," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Inflows returned, with the Investment Company Institute reporting investors added $1.982 billion to mutual funds in the week ending Jan. 11, after $3.157 billion of outflows the previous week.

While the legislation heading to Gov. J.B. Pritzker's desk will not affect CPS' rating in the short-term, the district's ability to manage labor conflict could affect credit quality over time, Fitch said.

Demand for muni bonds has slowly started make a comeback, with Jason Wong, vice president of municipals at AmeriVet Securities, saying, "this demand is a welcome sign to the tax-exempt sector as rising yields pushed investors to the sidelines."

Moody's downgraded St. Mary's College of California to Baa3 with a negative outlook, affecting $53 million in debt issued through the California

Volume for the upcoming week is estimated at $8.34 billion, consisting of $6.30 billion of negotiated deals and $2.04 billion of competitive sales.

Underwriting fees generated for the board totaled some $7.4 million, an almost 50% drop from the $14.3 million the board received in 2020.

The action affects about $312 million of debt. The outlook, previously positive, is stable at the new, higher rating.

The firm is expected to announce the new muni leadership team next week.

Outflows lessened, with the Investment Company Institute reporting investors pulled $3.157 billion from mutual funds in the week ending Jan. 4, after $3.402 billion of outflows the previous week.

Jim Stricklin has joined the team of advisors at Columbia Capital Management.