Munis show strength as heavy issuance continues

Munis richened on Wednesday as markets awaited news of a deal to reopen the Strait of Hormuz. U.S. Treasuries were little changed and equities ended mixed.

Muni yields fell by one to six points depending on the scale, with the biggest gains in the belly of the curve.

Kim Olsan of NewSquare Capital described the week's calendar as a "deal deluge" — she counted more than 30 deals greater than $100 million, and several above $500 million. The market has managed to absorb them for several reasons, she said, including a supportive backdrop from USTs, the outright value of their tax-equivalent yields and the positive news about negotiations with Iran that are quelling inflation fears.

"If there was a period or a week or beginning of a month where you would have a $20 billion calendar to come, this might have been the best entry point issuers could have hoped for," Olsan said.

ICI data
The Investment Company Institute Wednesday reported inflows of $405 million for the week ending July 29, following $883 million of inflows the previous week.

Exchange-traded funds saw inflows of $1.83 billion after $378 million of inflows the week prior, per ICI data.

New-issue market
In the primary market Wednesday, Goldman Sachs priced for the Black Belt Energy Gas District (A2///) $792.66 million of gas project revenue bonds, Series 2026K, with 5s of 10/2033 at 4.53%, callable 7/2033.

Barclays priced for the South Carolina Public Service Authority (A3/A/A/) $398.31 million of revenue obligation bonds. The first tranche, $252.03 million of improvement bonds, Series 2026D, saw 5s of 12/2026 at 2.67%, 5s of 2031 at 3.16% and 5s of 2034 at 3.46%, noncall.

The second tranche, $146.28 million of refunding bonds, Series 2026F, saw 5s of 12/2027 at 2.70%, 5s of 2031 at 3.16%, 5s of 2036 at 3.65%, 5s of 2041 at 4.13% and 5s of 2046 at 4.44%, callable 12/2036.

Morgan Stanley priced for the Virginia Polytechnic Institute and State University (Aa1/AA+//) $295.3 million of general revenue pledge bonds, with 5s of 6/2027 at 2.50%, 5s of 2031 at 2.89%, 5s of 2036 at 3.36%, 5s of 2041 at 3.90%, 5s of 2046 at 4.23%, 5s of 2051 at 4.50% and 5s of 2056 at 4.66%, callable 6/2036.