Municipals were little changed Tuesday as U.S. Treasury yields rose out long and equities ended down.
The two-year ratio Tuesday was at 72%, the five-year at 72%, the 10-year at 73% and the 30-year at 90%, according to Municipal Market Data's 3 p.m. ET read. ICE Data Services had the two-year at 70%, the five-year at 71%, the 10-year at 73% and the 30-year at 90% at 4 p.m.
As the second half of the month gets underway, munis are seeing small gains of 0.1%, bringing year-to-date returns to negative 0.96%. This compares to 2024, when returns for the month were 1.02% at the midway point of May, said Jason Wong, vice president of municipals at AmeriVet Securities.
"Although we are still behind last year's returns for the month, we are still in a better position than we were back in April of this year where we saw a dramatic selloff in the first half of the month due to tariffs initiated by the current administration as well as investors selling ahead of Tax Day, and the possibility of removal of tax-exemption in munis where returns were in the red at 1.74% before settling down at negative 0.81%," he said.
Since then, munis have rebounded as the threat of eliminating the tax exemption was "overblown," Wong said.
The "risk to the tax exemption appears to have dropped sharply as of last week ... taking with it the hypothetical risk of a supply surge ahead of any end-date for borrowers' exemption access," said Matt Fabian, a partner at Municipal Market Analytics.
The net impact is "very constructive for market fundamentals, especially ahead of reinvestment season," he said.
"The negatives are dominated by the proceeding of the House bill that would, by not paying for baseline [Tax Cuts and Jobs Act] tax cut extensions, worsen the already dismal trajectory for U.S. debt issuance," Fabian said.
The bill is "sufficiently negative" as to have given Moody's a reason to
"We have imminent June reinvestment, on its own $38 billion, but this is part of $101 billion of expected tax-exempt principal maturities through August: a number that is very likely to grow, perhaps by a lot, as more issuers (e.g., Chicago) refinance bonds to aid near-term cash flow," Fabian said.
With investors likely to deploy their June money a few weeks early, this week should start to feel the benefit, he said.
"Better still: yields are not far from where they have remained since the end of April: 4s and 5s available at or near par at longer maturities helps ensure sufficient retail demand for all the supply," he said.
Meanwhile, muni credit is strong, though heavy issuance serves as the biggest challenge, said Anders S. Persson, Nuveen's chief investment officer for global fixed income, and Daniel J. Close, Nuveen's head of municipals.
Most of the outsized debt has been earmarked to fund the rebuilding of U.S. infrastructure, including toll roads, airports, bridges, and ports, they said.
In the primary market Tuesday, Morgan Stanley priced for the New Jersey Educational Facilities Authority (Aaa/AAA//) $705.045 million Princeton University revenue bonds. The first tranche, $593.76 million of Series 2025A, saw 5s of 7/2046 with a put/tender date of 7/1/2031 at 3.32% and 5s of 2064 with a put/tender date of 7/1/2035 at 3.70%.
The second tranche, $111.285 million of Series 2025B, saw 5s of 7/2026 at 2.88%, 5s of 2030 at 2.99% and 5s of 2035 at 3.38%, noncall.
J.P. Morgan priced for the Leander Independent School District, Texas, $474.349 million PSF-insured unlimited tax school building and refunding bonds. The first tranche, $435.285 million of Series 2025A (/AAA/AAA/), saw 5s of 2/2026 at 2.95%, 5s of 2030 at 3.08%, 5s of 2035 at 3.50%, 5s of 2040 at 4.06%, 5s of 2045 at 4.48%, 5s of 2050 at 4.65% and 5s of 2055 at 4.74%, callable 8/15/2035.
The second tranche, $39.064 million of Series 2025B (/AA/AA+/), saw 5s of 8/2029 at 3.18%, 5s of 2030 at 3.20% and 5s of 2034 at 3.53%, noncall.
BofA Securities priced for the Maryland Department of Housing and Community Development's Community Development Administration (Aa1//AA+/) $200 million of residential revenue bonds. The first tranche, $45 million on non-AMT bonds, 2025 Series C, saw all bonds price at par — 3.4s of 9/2026, 3.9s of 3/2030, 3.9s of 9/2030, 4.4s of 3/2035, 4.4s of 9/2035, 4.75s of 9/2040, 5s of 9/2045 and 5.1s of 3/2052 — except for 5.5s of 3/2056 at 4.07%, callable 9/1/2033.
The second tranche, $155 million of taxables, $2025 Series D, saw all bonds priced at par — 4.464s of 3/2026, 4.736s of 3/2030, 4.766s of 9/2030, 5.553s of 3/2035, 5.593s of 9/2035, 5.963s of 9/2040, 6.199s of 9/2045 and 6.249s of 9/2051 — except for 5.5s of 9/2055 at 5.416%, callable 9/1/2033.
Jefferies priced for the College Station Independent School District, Texas, (Aaa///) $188 million unlimited tax school building and refunding bonds, with 5s of 8/2027 at 3.06%, 5s of 2030 at 3.12%, 5s of 2035 at 3.53%, 5s of 2040 at 4.09%, 5s of 2045 at 4.50% and 5s of 2050 at 4.66%, callable 8/15/2034.
Ramirez priced for the Virgin Islands Transportation and Infrastructure Corp. (/A//) $151.25 million grant anticipation revenue bonds, with 5s of 9/2025 at 3.42%, 5s of 2030 at 3.53%, 5s of 2035 at 3.92%, 5s of 2040 at 4.44% and 5s of 2044 at 4.75%, callable 9/1/2035.
Raymond James priced for the Osceola County School District, Florida, (Aa2//AA/) $109.185 million capital outlay sales tax revenue bonds, with 5s of 10/2026 at 3.00%, 5s of 2030 at 3.11%, 5s of 2035 at 3.62% and 5s of 2036 at 3.73%, callable 10/1/2034.
In the competitive market, Loudoun County, Virginia, (Aaa/AAA/AAA/) sold $208.08 million GO public improvement bonds, Series 2025A, to Truist, with 5s of 12/2025 at 2.87%, 5s of 2030 at 2.93%, 5s of 2035 at 3.30%, 4s of 2040 at 4.04% and 4.25s of 2044 at 4.40%, callable 12/1/2034.
The Fayette County Board of Education, Kentucky, (Aa3/AA//) sold $102.77 million GO refunding bonds to BofA Securities, with 5s of 2/2026 at 2.95%, 5s of 2030 at 3.07%, 5s of 2035 at 3.48% and 5s of 2036 at 3.58%, callable 2/1/2034.
Scottsdale, Arizona, (Aaa/AAA//) sold $102.25 million Project of 2019 GOs to Truist, with 5s of 7/2026 at 2.85%, 5s of 2030 at 2.95%, 5s of 2035 at 3.36%, 4s of 2040 at 4.10% and 4.5s of 2045 at 4.53%, callable 7/1/2035.
The North Kansas City School District No. 74, Missouri, (Aa1/AA+//) sold $100 million GO improvement bonds to Wells Fargo, with 6s of 3/2026 at 2.95%, 6s of 2030 at 3.05%, 6s of 2035 at 3.41%, 5s of 2040 at 3.96% and 4.5s of 2045 at 4.432%, callable 3/1/2035.
AAA scales
MMD's scale was little changed: The one-year was at 2.85% (unch) and 2.86% (unch) in two years. The five-year was at 2.92% (unch), the 10-year at 3.29% (unch) and the 30-year at 4.47% (+2) at 3 p.m.
The ICE AAA yield curve was little changed: 2.85% (-1) in 2026 and 2.80% (-2) in 2027. The five-year was at 2.92% (unch), the 10-year was at 3.28% (unch) and the 30-year was at 4.41% (unch) at 4 p.m.
The S&P Global Market Intelligence municipal curve was little changed: The one-year was at 2.85% (unch) in 2025 and 2.86% (unch) in 2026. The five-year was at 2.92% (unch), the 10-year was at 3.30% (unch) and the 30-year yield was at 4.46% (+2) at 4 p.m.
Bloomberg BVAL was little changed: 2.83% (unch) in 2025 and 2.88% (unch) in 2026. The five-year at 2.98% (unch), the 10-year at 3.31% (unch) and the 30-year at 4.44% (+2) at 4 p.m.
Treasury yields was weaker out long.
The two-year UST was yielding 3.969% (-1), the three-year was at 3.947% (-1), the five-year at 4.066% (flat), the 10-year at 4.48% (+3), the 20-year at 4.99% (+6) and the 30-year at 4.967% (+6) at the close.
Primary to come
The Kansas Department of Transportation (Aa2/AA//) is set to price Wednesday $730.765 million highway revenue and refunding bonds, Series 2025A, serials 2026-2044. J.P. Morgan.
The Washington Health Care Facilities Authority (/A/A+/) is set to price Wednesday $641.17 million Multicare Health System revenue bonds, consisting of $423.07 million of Series 2025A fixed rate bonds, serials 2026-2045, term 2051; $109.595 million of Series 2025B put bonds, serial 2055; and $108.505 million of Series 2025C put bonds, serial 2055. BofA Securities.
Boston (Aaa/AAA//) is set to price Wednesday $460.825 million of Series A GOs, serials 2026-2045. Raymond James.
Charlotte, North Carolina, is set to price Wednesday (Aa3//AA-/) $307 million airport revenue bonds, consisting of $281.875 million of non-AMT bonds, Series 2025A, serials 2026-2045, terms 2050, 2055, and $25.125 million of AMT bonds, Series 2025B, serials 2027-2044. BofA Securities.
Williamson County, Texas, (/AAA/AAA/) is set to price Wednesday a $304.41 million deal, consisting of $146.29 million unlimited tax road bonds, serials 2026-2045; $67.15 million limited tax refunding and park bonds, serials 2026-2045; and $90.97 million limited tax notes, serials 2026-2032. Raymond James.
Fort Bend County, Texas, (A2/AA/A+/) is set to price Wednesday $271.18 million Assured Guaranty-insured senior lien toll road revenue and refunding bonds, serials 2026-2045, terms 2050, 2055. Cabrera Capital Markets.
Polk County, Iowa, (Aaa/AAA//) is set to price Wednesday $237.83 million GO capital loan notes, consisting of $169.65 million of Series 2025A, serials 2027-2045, and $68.18 million of Series 2025B, serials 2027-2045. J.P. Morgan.
The Rhode Island Health And Educational Building Corp. (/BB-//) is set to price Thursday $143.285 million CharterCARE Health of Rhode Island Obligated Group hospital financing revenue bonds, consisting of $87.05 million Series 2025A tax-exempts, terms 2040, 2045, 2050, 2055, and $56.235 million Series 2025B taxable, serial 2035. Barclays.
New Braunfels, Texas, (Aa1///) is set to price Wednesday $134.24 million utility system revenue refunding bonds, serials 2025-2056. Piper Sandler.
The Florida Housing Finance Corp. is set to price Wednesday $130 million non-AMT homeowner mortgage revenue bonds, 2025 Series 3, serials 2027-2037, terms 2040, 2045, 2050, 2056, 2056. RBC Capital Markets.
The Ernest N. Morial New Orleans Exhibition Hall Authority (Aa3//AA+/) is set to price $125 million special tax revenue bonds. Morgan Stanley.
Lakeland, Florida, (Aa2//AA+/) is set to price $112.355 million capital improvement revenue and revenue refunding bonds, consisting of $74.47 million Series 2025A non-AMT refunding bonds, serials 2025-2045; $12.735 million Series 2025B AMT refunding bonds, serials 2026-2045; $25.15 million Series 2025C taxables, serials 2026-2045. Wells Fargo.
Competitive
The North Texas Municipal Water District is set to sell $204.175 million Panther Creek Regional Wastewater System contract revenue bonds at 11 a.m. Thursday.
The South Dakota Conservancy District is set to sell $198.24 million SRF program bonds, Series 2025A, at 11:15 a.m. Wednesday.
Montgomery County, Pennsylvania, is set to sell $148.855 million GOs at 10:30 a.m. Wednesday.
Chattanooga, Tennessee, is set to sell $146.935 million electric system refunding revenue bonds at 10 a.m. Wednesday.
The Salt Lake City School District Board of Education, Utah, is set to sell $140.95 million GOs at 11:30 a.m. Wednesday.
