Markets

Chicago's school district will tap its investment-grade dedicated capital improvement tax credit for the first time in five years in a $529 million deal.

Gov. Ron DeSantis on Monday signed the bill to rename the Reedy Creek Improvement District and end Disney's self-governance. Separately, the Legislature will look at prohibiting the issuance of environmental, social and governance bonds and using associated ratings.

Investors will be greeted Monday with a new-issue calendar estimated at $4.098 billion.

Moody's and S&P also warn of the potential for further downgrades; UC Health has begun to implement financial turnaround strategies amid operating losses.

A key consideration in the upgrade was the state's recent actions in both addressing longstanding obligation repayments and rapidly repaying obligations taken on during the pandemic-induced recession, S&P said.

An improving tone was apparent in the municipal market midweek — after a topsy-turvy ride last week when the market saw a close to 50-basis point adjustment to the front end of the triple-A municipal yield curve.

Earlier in the pandemic, bond values showed a greater divergence among local government issuers tracked, but that has reverted to pre-pandemic levels, although work-from-home and other uncertainties still take a toll.

Inflows continued with the Investment Company Institute reporting investors added $931 million to mutual funds in the week ending Feb. 15, after $2.194 billion of inflows the previous week.

"The close to 50 bp adjustment to the front end of the AAA municipal curve, taken at face value, appears to be a huge step toward pricing normalization for tax-exempts," said Eric Kazatsky, head of municipal strategy at Bloomberg Intelligence.

A bill introduced by Sen. Dave Min would prohibit banks that invest in gunmaking from working on any aspect of state public finances, including bond sales.