Munis will see another sub-five billion dollar volume week but the scarcity value is driving demand as the market continues to be strong in the face of rising interest rates.

Ipreo estimates volume will deflate to $4.9 billion, from the revised total of $2.98 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $3.18 billion of negotiated deals and $1.67 billion in competitive sales.

Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management, said the unemployment numbers that came out this morning put an even stronger bid on the market, heading into next that features a “chunky” calendar with all medium to small sized deals.

“Right now munis are hard to come by, so deals coming up should be well received,” said Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management. “Investors are starting to realize that you can’t just wait around for supply, because you just aren’t going to get a huge wave.”

He also noted that not only are buyers are starting to sense they can go further out on the curve but there is increased activity on the short end of the curve.

“The yields on the front end are very, very attractive,” he said. “In particular, the 3-year through 7-year spots have cheapened tremendously, leading to the bottom line which is that there very good value a lot of places on the curve.”

JPMorgan is scheduled to run the books on the week’s largest transaction - $635 million of electric revenue refunding bonds, including taxable and tax exempts - on Wednesday. The deal is rated Aa1 by Moody’s Investors Service, AA-minus by S&P Global Ratings and AA by Fitch Ratings.

The Dormitory Authority of the State of New York is back for the second week in a row – this time with $591 million of school districts revenue bond financing program bonds on Tuesday.

In the competitive arena, the city and county of San Francisco is set to sell three deals totaling $382 million on Tuesday. The proceeds are wide ranging, from public health and safety and affordable housing to earthquake safety and emergency responses. All three deals are rated Aaa by Moody’s, AA-plus by S&P and Fitch.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended May 4 were from Nevada, New York and Illinois issuers, according to Markit.

In the GO bond sector, the Clark County, Nev., 5s of 2048 traded 27 times. In the revenue bond sector, the DASNY 5s of 2048 traded 39 times. And in the taxable bond sector, the Illinois 5.877s of 2019 traded 13 times.

Week's actively quoted issues
Illinois, New York and Puerto Rico names were among the most actively quoted bonds in the week ended May 4, according to Markit.

On the bid side, the Bollingbrook, Ill., taxable 4.94s of 2021 were quoted by 363 unique dealers. On the ask side, the New York MTA revenue 5s of 2024 were quoted by 196 dealers. And among two-sided quotes, the Puerto Rico Commonwealth GO 8s of 2035 were quoted by 30 dealers.

Lipper: Muni bond funds saw outflows
Investors in municipal bond funds reversed course and pulled cash out of the funds in the latest reporting week, according to Lipper data released on Thursday.

The weekly reporters saw $344.710 million of outflows in the week ended May 2, after inflows of $229.481 million in the previous week.

Exchange traded funds reported inflows of $10.102 million, after outflows of $12.637 million in the previous week. Ex-ETFs, muni funds saw $364.813 million of outflows, after inflows of $242.118 million in the previous week.

The four-week moving average remained negative at -$218.779 million, after being in the red at -$194.379 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.

Long-term muni bond funds had outflows of $183.551 million in the latest week after inflows of $88.923 million in the previous week. Intermediate-term funds had outflows of $43.953 million after inflows of $67.332 million in the prior week.

National funds had outflows of $206.274 million after inflows of $257.056 million in the previous week. High-yield muni funds reported inflows of $28.680 million in the latest week, after inflows of $177.482 million the previous week.


Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.
Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.