Finance

While muni performance has turned negative for October, "the asset class is significantly outperforming UST," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

Chicago, upgraded Friday by Fitch, will follow City Council's expected passage of a new 2023 budget next month with a new money general obligation bond issue.

The strength of the California economy suggests it deserves higher ratings, CreditSights said, but slowing revenues could mean the state's credit has peaked.

"Municipal market performance has improved, but the bumpy road continues as investors remain uncertain about the interest rate environment," said Nuveen's Head of Municipals John Miller.

Selling pressure was on the rise again this week. Thursday's $2.919 billion of bonds out for the bid was only surpassed on March 19, 2020, when they hit $4.115 billion. A larger calendar closes out October.

The upgrade reflects the city's improving pension funding practices, commitment to a sound reserve position and ability to institute structural budget measures, Fitch said.

Massive mutual fund selloffs this year have returned the market to a pre-1976 investor landscape, when portfolios focused on individual demand, said MMA's Tom Doe.

The sale will fund improvements and repairs to public parks, waterfronts, and roads across the double-A-plus rated city.

"The curve slope has undergone a massive flattening this year and recent trends suggest demand pockets are developing in specific ranges," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Decisions by three organizations to drop Moody's ratings underscore an industry-wide trend as the sector struggles with rising costs and narrowing margins.

Variable-rate debt, tender option bonds and even prepaid gas bonds may stage a comeback in the current market, panelists at a GFOA conference said.

Outflows continued as investors pulled $4.532 billion from mutual funds in the week ending Oct. 12 after $5.172 billion of outflows the previous week, according to the Investment Company Institute.

CommonSpirit Health priced more than $1 billion of debt on schedule Tuesday after disclosing a ransomware attack that has impacted some IT operations.

Triple-A curves were a touch firmer in spots as secondary trading took a backseat to the larger primary activity with Connecticut and Massachusetts pricing general obligation bonds, a large CommonSpirit healthcare and several competitive issues led by Rhode Island GOs.

Volume rebounds eightfold this week with a new-issue calendar of $8.5 billion, including several billion-dollar deals.

The two hires boost Bancroft's muni staff to 11 in offices in Dallas, Fort Washington, Pennsylvania, and San Mateo, California.

"Despite a pick-up in volatility in the rates market, municipals have been performing relatively well in October," according to Barclays PLC.

Moody's says Hawaii's tourism-based economy is disproportionately vulnerable to high inflation. It affirmed the state at Aa2 ahead of a $800 million GO deal.

The Kansas Corporation Commission approved a $92.7 million securitization for Atmos Energy. It had already approved $328 million for Kansas Gas Service.

Refinitiv Lipper reported $2.262 billion of outflows from municipal bond mutual funds for the week ending Wednesday after $2.057 billion the week prior.