Markets

It could be the year's largest unrated municipal bond deal.

The bonds — $824.8 million tax-exempt and $400 million taxable — follow Orlando Health's major acquisitions of hospitals in Alabama and Florida.

Municipals are underperforming USTs month-to-date, with the Bloomberg Municipal Index showing losses of 1.02% versus 0.92% for USTs as of Tuesday, but both are outperforming losses in corporates that are seeing 1.23% losses in January.

S&P Global Ratings downgraded Chicago's general obligation debt to BBB from BBB-plus, saying the 2025 budget fails to address a structural imbalance.

"Even though it will be priced to sell, such large supply in one week may be a struggle for the asset class," said Anders S. Persson, Nuveen's chief investment officer for global fixed income, and Daniel J. Close, Nuveen's head of municipals.

Trading in Los Angeles credits has become more volatile. An L.A. Department of Water and Power deal slated for Wednesday went day-to-day.

Williams, a former salesman and founder of A. H. Williams & Co., became a "giant" in the Pennsylvania muni world through relationships built on trust. 

The muni market also faces an elevated new-issue calendar, which may put additional pressure on muni yields. Bond Buyer 30-day visible supply sits at $17.57 billion.

The Florida-based mining company failed to make $10 million in principal and interest payments due on Jan. 1. Florida had the largest number of defaults in 2024 at nine, per Municipal Market Analytics, Inc.

"It is the first step but that doesn't mean there's a second step," said John Bagley, the MSRB's chief market structure officer.