Municipals were slightly firmer in spots Friday ahead of a robust new-issue calendar, which includes two mega deals from New York issuers. U.S. Treasuries were little changed and equities were mixed.
During the week, UST yields moved higher, with short-end yields seeing the largest gains after an "overall hawkish Fed stance on Wednesday and a 30-year Treasury auction on Thursday," BofA strategists said.
Munis, meanwhile, managed to "eke out some small gains," though moves were small, they said, as the asset class continues its steady recovery.
MMD-UST ratios have fallen 12-13 percentage points across the curve over the last four weeks, Barclays strategists Mikhail Foux and Grace Cen said.
The two-year ratio Friday was at 74%, the five-year at 74%, the 10-year at 75% and the 30-year at 91%, according to Municipal Market Data's 3 p.m. ET read. ICE Data Services had the two-year at 73%, the five-year at 73%, the 10-year at 74% and the 30-year at 90% at 4 p.m.
While still cheap compared to levels seen at the start of the year, ratios are much less attractive than they were several weeks ago, they said.
"The start of the budget reconciliation/tax reform discussion might add additional uncertainty, although we are not overly concerned," Barclays strategists said.
"In our view, the worst for munis is behind us, at least for now; tax-exempts might continue to outperform, but only to a degree as technicals will remain somewhat challenging," Barclays strategists said.
The robust new-issue calendar has led the market participants to focus on the primary market, BofA strategists said.
Issuance for the week of May 12 is estimated at $12.16 billion, with $9.986 billion of negotiated deals and $2.174 billion of competitive deals on tap.
The New York City Transitional Finance Authority leads the negotiated calendar with $1.493 billion of future tax secured subordinate bonds, followed by the Dormitory Authority of the State of New York with $1.037 million of school district revenue bond financing program revenue bonds.
The competitive calendar is led by Nassau County, New York, with $277.715 million of general improvement bonds.
Heavy supply will be met with strong demand, BofA strategists said.
There are around $265 billion of principal redemption and coupon payments for the May through August period, while total issuance should total approximately $220 billion, they said.
"Secondary market trading volumes have fallen from April's elevated levels, but remain somewhat above the average level for 1Q25," BofA strategists said.
AAA scales
MMD's scale was bumped up to three basis points: The one-year was at 2.85% (-3) and 2.86% (-3) in two years. The five-year was at 2.94% (-3), the 10-year at 3.29% (-2) and the 30-year (unch) at 4.38% at 3 p.m.
The ICE AAA yield curve saw bumped up to two basis points: 2.82% (-1) in 2026 and 2.85% (-1) in 2027. The five-year was at 2.94% (-2), the 10-year was at 3.26% (-1) and the 30-year was at 4.38% (unch) at 4 p.m.
The S&P Global Market Intelligence municipal curve was bumped up to two basis points: The one-year was at 2.86% (-1) in 2025 and 2.86% (-2) in 2026. The five-year was at 2.95% (-2), the 10-year was at 2.29% (-2) and the 30-year yield was at 4.37% (unch) at 4 p.m.
Bloomberg BVAL was bumped up to a basis point: 2.83% (-1) in 2025 and 2.88% (-1) in 2026. The five-year at 2.99% (-1), the 10-year at 3.30% (-1) and the 30-year at 4.37% (unch) at 4 p.m.
Treasuries were little changed.
The two-year UST was yielding 3.884% (+1), the three-year was at 3.868% (+1), the five-year at 3.991% (+1), the 10-year at 4.379% (flat), the 20-year at 4.863% (-1) and the 30-year at 4.839% (-1) near the close.
Primary to come
The New York City Transitional Finance Authority (Aa1/AAA/AAA/) is set to price Wednesday $1.493 billion of future tax secured subordinate bonds, consisting of $650 million of tax-exempts, Fiscal 2025 Series I, Subseries I-1; $300 million of taxables, Fiscal 2025 Series I, Subseries I-2; $481.295 million of tax-exempt refunding bonds, Fiscal 2025 Series J, Subseries J-1; $40.615 million of taxables, Fiscal 2025 Series J, Subseries J-; and $20.79 million of tax-exempt refunding bonds, Fiscal 2025 Series K. Jefferies.
The Dormitory Authority of the State of New York (Aa3//AA-/) is set to price Wednesday $1.037 million of school districts revenue bond financing program revenue bonds, consisting of $988.035 million of Series A, serials 2026-2045, term 2052; $28.02 million of Series B, serials 2026-2040; and $20.53 million of Series C, serials 2026-2044. RBC Capital Markets.
The National Finance Authority (/A+//) is set to price Wednesday $855 million of Winston-Salem Sustainable Energy Partners revenue bonds, consisting of $769.63 million of Series A bonds, serials 2030-2035, 2041-2045, terms 2050, 2055, and $85.37 million of taxable Series B bonds, serial 2035. RBC Capital Markets.
The Harris County Hospital District (Aa1///AA+/) is set to price Tuesday $839.55 million of limited tax bonds. Jefferies.
The Black Belt Energy Gas District (/A-//) is set to price $659.2 million of gas project revenue bonds, 2025 Series A, serials 2027-2032, 2055. J.P. Morgan.
The Washington State Housing Finance Commission is set to price Thursday $519.765 million of nonprofit revenue bonds, consisting of $487.215 million of BAM-insured Series 2025A bonds (/AA//), serials 2029-2040, terms 2045, 2050, 2055, 2060, 2064, and $32.55 million of subordinate Series 2025B bonds (nonrated), term 2064. Barclays.
The California Infrastructure and Economic Development Bank (Aa3/AA//) is set to price Tuesday $485.915 million of UCSF Clinical and Life Sciences Building revenue bonds, serials 2031-2045, terms 2050, 2055, 2059. Goldman Sachs.
The Beaverton School District No. 48J, Oregon, (Aa1/AA+//) is set to price Tuesday $403.583 million of GOs, consisting of $162.073 million of Series A, serials 2031-2048, and $241.51 million of Series B, serials 2026-2029, 2044, 2049-2053. Piper Sandler.
The New Jersey Economic Development Authority is set to price Wednesday $300 million of non-rated Repauno Port & Rail Terminal Project dock and wharf facility revenue bonds. Morgan Stanley.
Seattle (Aaa/AA+//) is set to price Wednesday $257.72 million of water system improvement and refunding revenue bonds, serials 2025-2045, terms 2050, 2055. BofA Securities.
The New Jersey Higher Education Student Assistance Authority is set to price Thursday $257.3 million of AMT student loan revenue and refunding bonds, consisting of $23.12 million of Series 1A (/AA//), serials 2027-2035; $178.88 million of Series 1B (/AA//), serials 2027-2035, term 2045; $28 million of Series 1C (/BBB//), serial 2055; and $27.3 million of Series 3 (/AA//, serials 2027-2035. RBC Capital Markets.
The Northside Independent School District, Texas, (Aaa/AAA//) is set to price Wednesday $200 million of PSF-insured variable rate unlimited tax school building bonds, Series 2020, term 2050. Baird.
Whiting, Indiana, (A1/A-//) is set to price Tuesday $200 million of non-AMT Bp Products North America Inc. Project environmental facilities revenue bonds, Series 2008, serial 2044. J.P. Morgan.
The North Dakota Housing Finance Agency (Aa1///) is set to price Wednesday $200 million of non-AMT social housing finance program bonds, 2025 Series A, serials 2026-2037, terms 2040, 2045, 2050, 2053, 2056. RBC Capital Markets.
The South Carolina State Housing Finance and Development Authority (Aaa///) is set to price Wednesday $178 million of non-AMT mortgage revenue bonds, Series 2025 B, serials 2026-2037, terms 2040, 2045, 2050, 2055, 2055. BofA Securities.
The Arizona Board of Regents (Aa3/AA-//) is set to price Tuesday $160.83 million of University of Arizona System revenue and revenue refunding bonds, consisting of $118.745 million of Series A, serials 2027-2045, terms 2050, 2055, and $42.085 million of Series B, serials 2027-2045. J.P. Morgan.
The Bedford City School District, Ohio, (/AA//) is set to price Thursday $158.13 million of BAM-insured GO school improvement bonds, serials 2025-2045, terms 2050, 2055, 2058. Piper Sandler.
The Southern California Public Power Authority (/AA-/AA-/) is set to price Wednesday $138.06 million of Canyon Power Project refunding revenue bonds, consisting of $51.165 million of 2025 Series A, serials 2028-2036, and $86.895 million of 2025 Series B, term 2040. Wells Fargo.
The Burbank Unified School District, California, (Aa2///) is set to price Tuesday $132.925 million of GOs, consisting of $80 million of Election of 2024 bonds, serials 2026, 2033-2045, terms 2050, 2054, and $52.925 million of 2025 refunding GOs, serials 2025-2034. Raymond James.
The Waco Education Finance Corp. (/A+/AA-/) is set to price Wednesday $132.1 million of fixed-rate Baylor University issue revenue bonds, consisting of $84.315 million of tax-exempt Series 2025A bonds, serials 2031-2037, 2039-2041, 2043-2045, terms 2050, 2055, and $47.785 million of taxable Series 2025B bonds, serial 2030. BofA Securities.
The Massachusetts Development Finance Agency (/A+//) is set to price Wednesday $127 million of Brandeis University issue revenue bonds, consisting of $20 million of Series T-1, serials 2028-2035, and $107 million of Series T-2, serial 2055. Barclays.
The Mission Economic Development Corp. (Ba2/BB//) is set to price Monday $100 million of green Graphic Packaging International Project solid waste disposal revenue bonds. TD Securities.
Competitive
Nassau County, New York, (Aa2/AA/AA/) is set to sell $277.715 million of general improvement bonds, 2025 Series A, at 10 a.m. Wednesday.
The Fremont Unified School District, California, (Aa2///) is set to sell $250 million of Election of 2024 GOs, Series A, at 12:30 p.m. Thursday.
Clark County, Nevada, (Aa2/AA-//) is set to sell $202.71 million of highway revenue improvement and refunding bonds at 11:30 a.m. Tuesday.
Celina, Texas, (Aa1/AA//) is set to sell $144.91 million of tax and waterworks and sewer system revenue certificates of obligation at 11 a.m. Tuesday.
Orange County, Florida, (/AAA/AAA/) is set to sell $140.33 million of water and wastewater utility revenue bonds at 11 a.m. Tuesday.
Monmouth County, New Jersey, (Aaa//AAA/) is set to sell $138.72 million of GOs at 10:45 a.m. Wednesday.
St. Lucie County, Florida, (Aa2/AA//) is set to sell $122.615 million of non-ad valorem revenue bonds, Series 2025A, at 10:30 a.m. Wednesday.
