Finance

With interest rates expected to keep rising, the deal will tap all of the remaining authorization from the $3.5 billion Rebuilding Michigan bond program.

Bids wanteds have been elevated, municipal bond mutual fund outflows large and consistent and the short end of the U.S. Treasury curve continues its march upward, moves that muni investors cannot ignore.

Triple-A yields rose 11 to 15 basis points five years and in.

Retail investors may be moving out of municipal bond mutual funds and into separately managed accounts, largely due to the headline shock of the massive outflows from the funds, participants say.

One-year rates have risen 100 basis points, intermediate maturities have traded up about 25 basis points and long-term munis are nearly 50 basis points above June's close.

Munis were little changed while long UST improved and equities ended in the red after the FOMC raised the fed funds rate target 75bps to a range of 3% to 3.25% and members are leaning toward a rate of 4.4% by yearend.

The Puerto Rico Oversight Board is seeking the return of fees connected with Puerto Rico bonds and swaps.

Short triple-A yields have risen more than 30 basis points over the past eight sessions while the long bond has risen 19, per Refinitiv MMD data.

Triple-A muni yields rose another five basis points on the short end while UST rose up to seven. UST yields are the highest since 2007.

Improved commitments to pension funding, coupled with other changes to the two states' retirement systems, have yielded bond rating upgrades for both.

Municipals saw more cheapening on the short end Friday as selling pressure persisted all week.

The healthcare chain won breathing room as its letter of credit provider waived a rating covenant and removed an event of default provision for junk downgrades.

"Everyone is trying to figure out when the outflow cycle is over," said Craig Brandon, co-director of municipal investments at Eaton Vance.

"The labor noise is probably a little louder and is probably going to be with us for longer than we expected in late 2021 and is probably going to result in lower margins for a bit of time," S&P's Suzie Desai said.

The Investment Company Institute reported $2.034 billion of outflows from muni bond mutual funds in the week ending Sept. 7 compared to $2.594 billion of outflows the previous week.

Muni and UST yields surged Tuesday on expectations the Fed will have to aggressively raise interest rates to bring down inflation.

Fiona Ma delivered speeches Monday at The Bond Buyer California Public Finance conference and California Debt and Investment Advisory Commission pre-conference.

Monday's opening panel of The Bond Buyer California Public Finance conference in Los Angeles was an insiders' look at muni market challenges and opportunity.

Even after investors received an infusion of $18 billion of matured and called bond proceeds on Sept. 1, muni prices have continued to weaken, note CreditSights strategists Pat Luby and John Ceffalio.

Fitch raised Wayne County's rating to A from BBB-plus, putting its fiscal distress further in the rearview mirror following a round of upgrades this year.