Markets

The competitive bond sale comes after the triple-A-rated city received a negative outlook from S&P over the use of reserves to ease budget pressures.

The state transportation commission expects to tap into $1.5 billion of revenue bond authorization with two deals totaling $350 million this year.

This week's expected elevated $12.6 billion in supply" "coincides with a recent uptick in secondary offerings … and may skim some froth from the market, particularly where spreads have hit one-year tights," said J.P. Morgan strategists led by Peter DeGroot.

The downgrade reflects ongoing underperformance in ridership and revenues relative to Kroll's expectations.

The new-issue calendar is led by Washington with $1.3 billion of GOs selling by competitive bid in three series.

Piper Sandler will price $100 million of electric revenue bonds for Iowa public utility Muscatine Power and Water on Wednesday.

Longer-term bonds could ease financial pressure for Sound Transit's $54 billion long-range plans.

Munis enter this year with "strong credit fundamentals, elevated tax-equivalent yields, and a steeper curve that supports duration extension," said James Welch, municipal portfolio manager at Principal Asset Management.

Proceeds will help finance late stages of construction of city hall.

Yields have seen "intermittent volatility from broader macro and geopolitical crosscurrents, keeping sentiment cautious despite relatively muted headline moves," said James Pruskowski, managing director at Hennion & Walsh.