Finance

The upgrade "is driven by sustained improvements in the city's income tax collections and the city's superior gap-closing capacity," Fitch said.

The Investment Company Institute reported investors pulled $136 million from municipal bond mutual funds in the week ending June 28, after $338 million of inflows the previous week.

Much uncertainty remains as the second half of the year begins, with Federal Reserve rates, recession and inflation all still to be decided.

"Lower volumes, lighter primary issuance, and heavier reinvestment cash flows are likely going to contribute to a continued bout of muni relative performance," said Birch Creek Capital strategists.

For the coming week, investors will be greeted with a new-issue calendar estimated at $304.5 million. This marks the lowest week of issuance in 2023.

Total volume for the month was $34.436 billion in 744 issues, down from $37.775 billion in 984 issues a year earlier, according to Refinitiv data.

Triple-A yields rose one to five basis points, depending on the scale, as secondary trading showed cheaper prints and some new-issues had to be cheapened to clear the market while USTs saw larger losses of up to 16 basis points on the three and five year.

S&P analyst Anne Cosgrove cited "Kentucky's commitment and execution to strengthen its budgetary flexibility and long-term financial stability."

Ted Damutz and Lina Santoro have joined Kroll Bond Rating Agency as directors in the public finance department in New York City.

With the first half of the year ending on Friday, municipal sources say the second half of the year will be off to a good start.

David Fields, Rob Whitlock and Naomi O'Dell have been hired from RBC Capital Markets and will work out of the firm's Philadelphia and Chicago offices.

While supply has started to pick back up with an outsized primary market calendar this week, it's still not enough to meet demand, said Cooper Howard, a fixed income strategist at Charles Schwab.

Despite a slow start to the week, "buyers are becoming more constructive, and there's increased buying going on," said Pat Luby, a CreditSights strategist.

Some in the industry already use AI to help determine fair bid and offer prices and to summarize new-issue offering statements, but full integration into all aspects of the market is a ways away.

The $6.9 billion new-issue calendar features high-grade deals from Georgia, Washington and Massachusetts, among other frequently traded credits, which should provide direction for scales.

Municipal bond mutual fund inflows returned as Refinitiv Lipper reported investors added $672.288 million for the week ending Wednesday following $256.532 million of outflows the week prior.

The upgrades brought the Orange County Transportation Authority managed lanes toll credit to double-A levels across the board.

The Investment Company Institute reported investors added $16 million to municipal bond mutual funds in the week ending June 14, after $495 million of inflows the previous week.

Due to the Fed meeting-induced lighter new-issue calendar last week, and a holiday-shortened week this week, Birch Creek strategists said, "buyers had no qualms about putting cash to work."

Investors will be greeted with a new-issue calendar estimated at $5.031 billion led by several New York issues.