Finance

Brightline asked S&P to withdraw its rating after the latest downgrade.

Market technicals should weaken this month in line with seasonal expectations, with estimated redemption capital of $32 billion compared to estimated supply of $41 billion, said Appleton Partners strategists.

Market Intelligence analyst Jeff Lipton distills what he heard onstage and in the hallways at The Bond Buyer's 2026 National Outlook, from policy uncertainty and the muni tax exemption to AI's growing role and credit risk hotspots.

With USTs stable and the "snoozer" of economic data Wednesday morning, the muni market has settled, with muni yields little, said Jeff MacDonald, EVP and head of fixed income strategies at Fiduciary Trust International.

Los Angeles' weakening fiscal picture and the city utility's exposure to lawsuit liability from the 2025 Palisades fire were cited for the downgrades.

"Once the damage is done, it takes a little longer for it to come back," said Elaine Brennan, executive director of the public finance department at Roosevelt and Cross, of the muni market.

Chicago returns to market March 10 with $800.29 million of general obligation bonds, following bond rating downgrades from Fitch Ratings and KBRA.

A recent report from The Bond Buyer found that data quality and accuracy was the top concern among AI skeptics in the industry.

Major Texas cities are prepping big bond issues to finance convention center expansions, with Houston hitting the market this week with $1.425 billion of debt.

First thing this morning, there wasn't much action as market participants waited to see what would happen, but as the day went on, munis got progressively weaker, said Kyle Gerberding, director of trading, a portfolio manager and partner at Asset Preservation Advisors.

Market Intelligence analyst Jeff Lipton assesses the early impacts of Operation Epic Fury on rates, spreads, shifting inflation expectations, and flows, arguing that elevated tax-exempt income, disciplined sector allocation and a quality bias can help muni investors navigate headline-driven volatility.

On the week, the muni market performed well, with most investor action happening in the longer half of the curve, said BofA strategists.

The ratings agency cited improved operating performance.

The fund plans to liquidate remaining assets, although a class-action lawsuit may delay final distributions.

Investors added $1.029 billion to municipal bond mutual funds in the week ended Wednesday, following $1.269 billion of inflows the prior week, according to LSEG Lipper data. This is the seventh time in eight weeks that inflows have topped $1 billion.

Findings from The Bond Buyer's 2026 Predictions Report show tax shakeups and political uncertainty pose major challenges to public finance.

Fitch Ratings released a draft of climate vulnerability in rating criteria for public finance issuers that earned a thumbs-up from Municipal Market Analytics.

KBRA and Fitch Ratings downgraded Chicago's general obligation bonds to BBB-plus from A-minus on Wednesday, and both kept their rating outlooks at negative.

There is a positive view of the muni market in the long-term due to a mix of attractive tax-adjusted yields and a generally favorable credit backdrop, said Cooper Howard, director of fixed income research and strategy at Charles Schwab.

While broader economic risks remain, market dynamics are being driven by supply, demand and income generation, rather than macro headlines, said Pat Haskell, head of the municipal bond group at BlackRock.