Muni benchmarks firm amid an already issuer-friendly pricing environment

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The muni market saw a handful of deals price to kick off the weekly issuance, while the market strengthened ahead of the bellwether deals that come Wednesday and Thursday.

"Demand for munis is not faltering and yields dropped today ahead of the crux of issuance," said one Texas trader. "As if the market was not already issuer friendly, it got even more so today."

He added that although the big deals this week carry headline risk, such as Chicago's upsized $1.47 billion borrowing, they should not have problems getting done as investors clamor for high-yield.

"My guess is they will come and go rather quickly, in this market pretty much everything is."

Primary market

Siebert Williams Shank priced Bexar County Hospital District’s (Aa1 /AA+) $284.40 million of certificates of obligation and limited tax refunding bonds on Tuesday.

Piper Sandler priced Ysleta Independent School District, Texas’ (Aaa/AAA/ ) $251 million of unlimited tax school building bonds. The deal is backed by the Permanent School Fund Guarantee Program.

Citi priced Ohio Housing Finance Agency’s (Aaa/NR/NR) $149.995 million of residential mortgage revenue non-alternative minimum tax bonds.

Citi also priced New Hampshire Health and Education Facilities Authority’s ( A/A) $125 million of revenue bonds for the Dartmouth-Hitchcock Obligated Group.

Secondary market
Munis were mixed on the MBIS benchmark scale, with yields falling by three basis points in the 10-year maturity and rising by two basis points in the 30-year. High-grades were stronger, with yields on MBIS AAA scale decreasing by four basis points in both the 10- and 30-year maturities.

On Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on both the 10- and 30-year GO were two basis points lower to 1.33% and 1.96%, respectively.

The 10-year muni-to-Treasury ratio was calculated at 73.2% while the 30-year muni-to-Treasury ratio stood at 86.1%, according to MMD.

Stocks were mixed and Treasuries yields were mostly lower. The Treasury three-month was yielding 1.562%, the two-year was yielding 1.580%, the five-year was yielding 1.628%, the 10-year was yielding 1.821% and the 30-year was yielding 2.275%.

The Dow Jones was up 0.15%, The S&P 500 decreased by about 0.02% and the Nasdaq was down 0.15%.

“The ICE muni yield curve is one basis point lower today after having finished yesterday unchanged,” ICE Data Services said in a Tuesday market report. “High-yield is unchanged while tobaccos are unchanged to down one basis point. Taxable yields are down three to four basis points and Puerto Rico is mixed."

Previous session's activity
The MSRB reported 29,742 trades Monday on volume of $7.351 billion. The 30-day average trade summary showed on a par amount basis of $10.74 billion that customers bought $5.65 billion, customers sold $3.26 billion and interdealer trades totaled $1.82 billion.

California, New York and Texas were most traded, with the Golden State taking 14.098% of the market, the Empire State taking 13.705% and the Lone Star State taking 9.971%.

The most actively traded security was the Texas Private Activity Board Surface Transportation Corp. taxable 3.922s of 2049, which traded 17 times on volume of $64.990 million.

Treasury to sell $35B 4-week bills
The Treasury Department said it will sell $35 billion of four-week discount bills Thursday. There are currently $37 billion of four-week bills outstanding.

Treasury also said it will sell $35 billion of eight-week bills Thursday.

Gary E. Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation.

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