Municipals were firmer in secondary trading Tuesday as the primary market was busy and several deals were accelerated. UST yields fell and equities ended up.
The two-year ratio Tuesday was at 80%, the five-year at 80%, the 10-year at 80% and the 30-year at 95%, according to Municipal Market Data's 3 p.m. EDT read. ICE Data Services had the two-year at 78%, the five-year at 79%, the 10-year at 79% and the 30-year at 94% at 4 p.m.
Munis continue to offer "attractive relative value as volatility weighs on equity markets," said Mike Goosay, Principal Asset Management CIO and global head of fixed income.
Supply has surged, with nearly $160 billion issued so far this year, placing 2025 on track for record volume, he said.
However, preliminary issuance figures show that supply is at $39.249 billion for April, down 12.7%, as many deals were postponed or moved to the day-to-day calendar due to tariff-induced market volatility and have yet to price.
However, it may be too close to call whether issuance will rise or fall year-over-year in April, as $5.9 billion is on tap for the final two trading sessions, including multiple deals that got accelerated Tuesday, according to J.P. Morgan strategists.
This would put April's volume at just over $45.148 billion, ticking up only 0.45% from 2024's total of $44.945 billion for the month.
Of the deals that did come to the market this month, some of the issuance stems from project finance largely "drying up" because of where rates are, said Jennifer Johnston, senior vice president and director of research, municipal bonds, for Franklin Templeton Fixed Income.
Many of the deals that come to the muni market are a last resort for issuers as they can't find funding in other markets, she said.
"Sectors across the board are ready to issue, ready to get back to building capital to the extent rates might go up," Johnston said.
Furthermore, "everybody's in the market trying to borrow, which is interesting given the technicals," she said.
"This technical imbalance has pressured valuations, keeping municipal yields elevated and pushing municipal-to-Treasury ratios to their most attractive levels since 2022," Goosay said.
Elsewhere, the muni market is in a good position to manage whatever gets "thrown at us," Johnston said.
Leading up to the election, the market was starting to show signs of a slowdown, she said.
"A lot of the growth that we've seen in the municipal side has come from the post-COVID expansion and inflation that drives up sales taxes and income taxes," which are primary revenue sources for a lot of state and local governments, Johnston said.
The market is approaching the future — including more volatility on the horizon, such as when the 90-day tariff pause ends — with a pretty strong credit spectrum, she said.
While there are certain sectors struggling a little bit more than others, "we feel pretty good about it," Johnston said. Budgets for this fiscal year that had slower growth assumptions are now outpacing those expectations, she said.
"We've seen a pretty good positioning in terms of budgets and revenue sources. To the extent that what's going on can be inflationary, or there's the potential for a recession. Honestly, we think most of the market would be able to weather it. They prepared for it ahead of time, and they came out of this very challenging period of time," she said.
In the primary market Tuesday, J.P. Morgan priced and repriced for the Port Authority of New York and New Jersey (Aa3/AA-/AA-/) $606.305 million of consolidated refunding bonds, 248th series, with yields bumped from Tuesday's preliminary pricing: 5s of 1/2026 at 2.98% (-7), 5s of 2030 at 3.19% (-8), 5s of 2035 at 3.54% (-11), 5s of 2040 at 3.99% (-13), 5s of 2045 at 4.37% (-14), 5s of 2050 at 4.57% (-10) and 5s of 2055 at 4.64% (-10), callable 1/15/2035.
Morgan Stanley priced for Louisiana (Aa2/AA//AA/) $353.675 million of GOs, Series 2025-B, with 5s of 6/2026 at 3.07%, 5s of 2030 at 3.25%, 5s of 2035 at 3.58%, 5s of 2040 at 4.06% and 5s of 2045 at 4.39%, callable 6/1/2035.
Truist accelerated a pricing for Indiana Finance Authority's (/AAA/AAA/) $274.61 million of green state revolving fund program refunding bonds, Series 2025C, with 5s of 2/2026 at 3.08%, 5s of 2030 at 3.27%, 5s of 2035 at 3.67%, 5s of 2040 at 4.12%, 5s of 2045 at 4.48% and 5s of 2046 at 4.52%, callable 2/1/2035.
Morgan Stanley priced for the Massachusetts Development Finance (/BBB+/BBB+/) on behalf of
The second tranche, $85 million of long-term Series 2025B bonds, saw 5s of 8/2055 with a mandatory tender date of 8/15/2031 at 4.04%, callable 2/15/2031.
Morgan Stanley priced for Brown University Health (/AA+/BBB+/) $156.95 million of taxable Series 2025C bonds, with 5.05s of 2/2030 priced at par, callable 8/15/2029.
BofA Securities accelerated a pricing for Oregon (Aa1/AA+/AA+/) $243.395 million of GO interstate bridge replacement project bonds, 2025 Series E, with 5s of 5/2026 at 3.03%, 5s of 2030 at 3.22%, 5s of 2035 at 3.83%, 5s of 2040 at 4.22%, 5s of 2045 at 4.61% and 5s of 2050 at 4.75%, callable 5/15/2030.
Wells Fargo priced for the University of the North Texas System Board of Regents (Aa2//AA/AA/) $214.99 million of tax-exempt revenue financing system refunding and improvement bonds, Series 2025A, with 5s of 4/2026 at 3.17%, 5s of 2030 at 3.32%, 5s of 2035 at 3.67%, 5s of 2040 at 4.10%, 5s of 2045 at 4.50% and 5s of 2050 at 4.68%, callable 4/15/2035.
BofA Securities priced for the Colorado State University System Board of Governors (Aa3/A+//) $100.57 million of system enterprise revenue and revenue refunding bonds. The first tranche, $86.49 million of revenue bonds, Series 2025C, saw 5s of 3/2028 at 3.22%, 5s of 2030 at 3.36%, 5s of 2035 at 3.77%, 5s of 2040 at 4.22%, 5s of 2045 at 4.64%, 5.25s of 2050 at 4.74% and 5.25s of 2055 at 4.84%, callable 3/1/2035.
The second tranche, $14.08 million of revenue refunding bonds, Series 2025D-1, saw 5s of 3/2026 at 3.08%, 5s of 2030 at 3.30% and 5s of 2035 at 3.71%, callable 3/1/2035.
Raymond James priced for Prince William Water, Virginia, (Aaa/AAA//) $111.985 million of water and sewer system revenue and refunding bonds, with 5s of 7/2026 at 3.02%, 5s of 2030 at 3.11%, 5s of 2035 at 3.46%, 5s of 2040 at 3.91%, 5s of 2045 at 4.28%, 5s of 2050 at 4.48% and 5s of 2055 at 4.50%, callable 7/15/2035.
In the competitive market, Delaware (Aaa/AAA/AAA/) sold $316.94 million of GOs to BofA Securities, with 5s of 5/2026 at 2.87%, 5s of 2030 at 3.03%, 5s of 2035 at 3.36%, 4s of 2040 at 3.97% and 5s of 2045 at 4.23%, callable 5/1/2035.
Shelby County, Tennessee, (Aa1/AA+//) sold $270.865 million of GO public improvement and school bonds, 2025 Series A, to BofA Securities, with 5s of 4/2026 at 3.02%, 5s of 2030 at 3.14%, 5s of 2035 at 3.51%, 5s of 2040 at 3.97% and 5s of 2045 at 4.38%, callable 4/1/2035.
Pasadena, California, (/AAA//) sold $195 million of central library project GOs to BofA Securities, with 5s of 9/2026 at 2.70%, 5s of 2030 at 2.85%, 5s of 2035 at 3.24%, 5s of 2040 at 3.72%, 5s of 2045 at 4.13%, 5s of 2051 at 4.44% and 5s of 2054 at 4.48%, callable 9/1/2035.
Mesa, Arizona, (/AA/AAA/) sold $154.265 million of GOs to Truist, with 5s of 7/2025 at 2.90%, 5s of 2030 at 3.19%, 5s of 2035 at 3.56%, 5s of 2040 at 3.98% and 5s of 2045 at 4.39%, callable 7/1/2035.
The Regional Transportation Authority, Illinois, (/AA/AA+/) sold $130 million of GOs, Series 2025A, to BofA Securities, with 5s of 6/2026 at 3.15%, 5s of 2030 at 3.35%, 5s of 2035 at 3.77%, 5s of 2040 at 4.22%, 5s of 2045 at 4.61%, 5s of 2050 at 4.79% and 5s of 2055 at 4.87%, callable 6/1/2035.
AAA scales
MMD's scale was bumped six to eight basis points: The one-year was at 2.89% (-8) and 2.92% (-8) in two years. The five-year was at 3.04% (-8), the 10-year at 3.36% (-8) and the 30-year at 4.40% (-6) at 3 p.m.
The ICE AAA yield curve was bumped one to nine basis points: 2.89% (-9) in 2026 and 2.91% (-6) in 2027. The five-year was at 3.01% (-2), the 10-year was at 3.34% (-2) and the 30-year was at 4.41% (-1) at 4 p.m.
The S&P Global Market Intelligence municipal curve was bumped six to seven basis points: The one-year was at 2.90% (-6) in 2025 and 2.93% (-6) in 2026. The five-year was at 3.05% (-7), the 10-year was at 3.37% (-7) and the 30-year yield was at 4.40% (-6) at 4 p.m.
Bloomberg BVAL was bumped five to six basis points: 2.86% (-6) in 2025 and 2.91% (-6) in 2026. The five-year at 3.05% (-6), the 10-year at 3.37% (-6) and the 30-year at 4.41% (-5) at 4 p.m.
Treasuries saw gains throughout the curve.
The two-year UST was yielding 3.653% (-4), the three-year was at 3.644% (-4), the five-year at 3.769% (-5), the 10-year at 4.165% (-5), the 20-year at 4.657% (-5) and the 30-year at 4.639% (-5) near the close.
Primary to come
The District of Columbia (Aa1/AAA//) is set to price Thursday $1.491 billion of income tax secured revenue bonds, consisting of $1.19 billion of tax-exempt refunding bonds, Series 2025A, serials 2026-2045, term 2050, and $301.08 million of taxables, Series 2025B, serials 2026-2040, terms 2045, 2050. Wells Fargo.
The East Bay Municipal Utility District, California, (Aaa/AAA//) is set to price Thursday $1.095 billion of water system revenue bonds, consisting of $256.505 million of green Series 2025A bonds, serials 2040-2045, terms 2049, 2055; $473.455 million of Series 2025B refunding bonds, serials 2026-2045; and $364.55 million of Series 2025C refunding bonds, serials 2036-2040. Wells Fargo.
The Los Angeles Department of Water and Power (Aa2//AA-/AA-/) is set to price Thursday $993.525 million of power system revenue bonds, 2025 Series A. Barclays.
The Black Belt Energy Gas District (/A-//) is set to price Thursday $659.2 million of gas project revenue bonds, 2025 Series A, serials 2027-2032, 2055. J.P. Morgan.
The Colorado Educational and Cultural Facilities Authority is set to price Wednesday $291.71 million of the Stanley Project cultural facilities revenue bonds, consisting of $210.235 million of senior lien bonds Series 2025A-2, term 2059; $31.29 million taxable senior lien bonds, Series 2025A-2, term 2045; and $50.185 million of subordinate lien bonds, Series 2025B, term 2059. RBC Capital Markets.
The Tennessee Housing Development Agency (Aa1/AA+//) is set to price Wednesday $200 million of non-AMT social residential finance program bonds, Issue 2025-1A, serials 2026-2037, terms 2040, 2045, 2050, 2055, 2056. RBC Capital Markets.
The Build NYC Resource Corp. (/BBB+//) is set to price Thursday $196 million of TRIPS Obligated Group senior airport facilities revenue bonds. J.P. Morgan.
The Rhode Island Student Loan Authority (/AA//) is set to price Wednesday $125 million of senior education loan revenue bonds, consisting of $100 million of AMT Series 2025A bonds, serials 2029-2034, term 2044, and $25 million of taxable Series 2025-1 bonds, serial 2044. RBC Capital Markets.
The Denver Health and Hospital Authority, Colorado, (/BBB/BBB/) is set to price Thursday $116.37 million of healthcare revenue refunding bonds, Series 2025A, terms 2045, 2050, 2055. Piper Sandler.
The University of North Carolina at Chapel Hill (Aaa/AAA/AAA/) is set to price Wednesday $100 million of general revenue bonds, Series 2012B. Wells Fargo.
