Markets

Arent Fox and Schiff Hardin are poised to expand their public finance operations, creating a firm with more than 600 attorneys and public finance practices in four major U.S. cities.

Stability at the state government level and the prospects of more aid in fiscal 2023 eased balance sheet pressures on Illinois' public universities.

Inflation remains under market scrutiny, with Monday’s data suggesting consumers expect price pressures to cool later this year.

Fitch affirmed its BB-minus rating of the Del Mar Race Track Authority. The rating dropped below investment grade after the March 2020 stay-at-home orders.

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.