Finance

The finance team on the Western Placer Waste Management Authority deal hopes to benefit from an improving market with increased inflows.

"Demand for low-duration tax-exempts has been so strong that short maturity benchmark yields are now lower than the after-tax yields for comparably rated benchmark taxable muni and corporate bonds," said CreditSights strategists Pat Luby and John Ceffalio.

Spreads on underwriting municipal bonds dipped to below $4 per $1,000 on issues in the first half of 2022 due to heavy competition and a shrinking volume of deals — the lowest figures reported in two decades.

New-issue volume grows to $10.7 billion led by a $2.7 billion taxable Massachusetts ESG deal, $1.35 billion of Oklahoma natural gas taxables, $1.25 billion from the Regents of the University of California and $1.1 billion from New York City.

S&P revised the state's outlook to positive in September, which gives it a one-in-three chance of a ratings boost over the two-year outlook period.

Pressure on the short end of the muni curve is being exacerbated by a 3.24% two-year Treasury note, from a correction to floating rate notes and dealer positions.

The Investment Company Institute reported investors poured in $1.589 billion into muni bond mutual funds in the week ending August 3, the highest level since November.

Several large new issues priced. Municipal yields were little changed, U.S. Treasuries were weaker on the short end and stocks ended in the red ahead of the much-anticipated July inflation figure.

Raymond James has brought two retired school superintendents on board in Kansas City to bolster its Missouri K-12 practice.

Weekly supply is holding below $5 billion, reinvestment needs are still in effect from large redemptions and fund flows are leaning more positive, noted FHN Financial's Kim Olsan.

Investors will be greeted Monday with an increase in supply with the new-issue calendar estimated at $5.941 billion, up from total sales of $1.700 billion.

Investors poured $1.094 billion into municipal bond mutual funds in the latest week, versus the $236.491 million of inflows the week prior. It marks only the second time this year inflows eclipsed $1 billion.

The Investment Company Institute reported investors pulled $246 million out of muni bond mutual funds in the week ending July 27 compared to the $602 million of outflows in the previous week.

The large primary was led by two $700-plus million of revenue bonds from the Port of Seattle and the Georgia Ports Authority.

Fitch and S&P moved the district's outlook to stable as its balance sheet weathered the COVID-19 storm and pension overhaul legislation removes the threat of looming insolvency.

Summer redemption season starts winding down; Net negative supply stands at $18.777 while 30-day visible is at $12-plus billion.

Several states are holding sales tax holidays for school supplies and other items amid strong revenue collections, although critics say they will do little to ease the impact of high inflation.

Municipals will end July with positive returns across all sectors. The Bloomberg Municipal Index shows a 2.49% return in July, moving year-to-date losses lower to 6.71%.

A rating upgrade by Moody's Investors Service means Minnesota has triple-A ratings from three major rating agencies.

Investors added $236.491 million to municipal bond mutual funds, per Refinitiv Lipper data, versus the $698.782 million of outflows the week prior. High-yield saw inflows hit nearly $550 million.