Markets

Municipal yields rose up to 10 basis points on the short end, playing catch up to the volatility of Treasuries' moves on Thursday. Rising UST rates will inevitably be more significant for munis until they settle into more stable levels.

Refinitiv Lipper reported the first inflows into municipal bond mutual funds at $216 million after three weeks of large outflows while high-yield saw small outflows. Exchange-traded funds reported $755 million of inflows.

An unfortunate custom in municipal finance is to discount every cash flow with the same rate, namely by the yield of the refunding issue. This underestimates the worth of nearby savings, and overestimates that of savings in the distant future.

The previously unrated Santa Cruz Metropolitan Transit District will be the first transit agency to price debt to cover pension liabilities when it hits the market Wednesday.

Markets were somewhat comforted by Federal Reserve Bank of Atlanta President Raphael Bostic’s comments suggesting the Fed will not be as aggressive as the markets suspect.

Gross savings from the transaction is expected to be $378 million, or about $11 million a year, which would result in around $250 million in net present value debt service savings.

A selloff in Treasuries didn't throw Washington's deal off course, according to the treasurer's office.

S&P Global Ratings has revised the outlook to positive from stable on the Bluegrass State and affirmed the A issuer credit rating.

The state of Washington sold $743 million of general obligation bonds in the competitive market at similar spreads to its November sale while some issuers have moved to the day-to-day calendar.

Susana Mendoza argues that a budget plan that would use surpluses to pay down bills and raise pension contributions shows the state is on the right fiscal path.