Markets

Leases backing many of the bonds are scheduled to expire before the debt is fully repaid, Moody's warned.

The muni market will also receive $28 billion of principal and interest set to be paid to investors Thursday, according to CreditSights.

"Assured is going nowhere and will be here long after the Chapter 11 cases conclude," the attorney representing the bond insurer told the bankruptcy court.

Nuveen LLC offered up its entire position in bankrupt Brightline's senior uninsured bonds, according to people familiar with the matter.

The muni market is getting some relief from the new-issue calendar, as issuers have put deals on hold, according to Pat Luby, head of municipals and senior market municipal strategist for CreditSights.

The city delayed a $1.8 billion deal that was on the calendar this week, but the new money deal proceeds will be needed for a project tied to the 2028 Olympics.

Less supply coming to market lets "existing float get distributed," said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

The end of September, which is also the end of the fiscal quarter, is a historically volatile time, according to James Pruskowski, managing director at Hennion & Walsh. That volatility, driven by shoring up unsettled positions and balance sheets, is exacerbating yields' upward climb in both munis and Treasuries.

The surge in yields has "crushed" bond prices and driven total returns well into negative territory, said CreditSights strategists.

Factors such as financial disclosure schedules are one reason big bond deals from New York City and the state have to share tight space in the bond calendar.