Markets

The northern California school district has been struggling for years and on several occasions abandoned plans to consolidate schools, which rating agencies say might have shored up finances.

Jamie Doffermyre  has worked in munis at Truist Securities, Citi and Merrill Lynch.

The upgrade is driven by realized and expected improvement in the state's financial metrics, the rating agency said.

"We're not going to be having huge reinvestment months over the next few months, not until the beginning of the year. So we need this flow [of deals] to keep up with demand, and we expect that to continue," said Jennifer Johnston, director of municipal bonds research at Franklin Templeton.

With the advance refunding of tax-exempt munis still off the table, issuers are using existing market conditions to shed Build America Bonds and realize debt service savings through tender offers.

North Carolina's triple-A ratings were affirmed ahead of plans to sell up to $506 million in general obligation and limited obligation bonds.

The tax-exempt market is expected to be "biased higher" in the coming weeks and months as the expected heavy pace of issuance this month will not be as "oppressive" as feared, said Pat Luby, head of municipal strategy at CreditSights.

"I've never seen this level of hand wringing at the issuer level," said Matt Boles, managing director at RBC Capital Markets.

The first part of exclusive research from The Bond Buyer finds that most industry optimists say funding needs will be met sometime after 2035.

Demand may strengthen as "investors anticipate the Federal Reserve's likely path of rate cuts, which would drive yields even lower," said Tom Kozlik, managing director and head of public policy and municipal strategy at HilltopSecurities.