The muni selloff slowed on Tuesday, but yields continued to cheapen, as U.S. Treasuries were mixed and equities ended lower.
Muni yields were cut by up to 10 basis points, with the worst losses at the front of the curve and the long end little changed. UST yields were richer by up to four basis points for bonds seven years and in and cheaper by one to four basis points for 10 years and out.
The muni market is getting some relief from the new-issue calendar, as issuers are putting deals on hold, according to Pat Luby, head of municipals and senior market municipal strategist for CreditSights. The deals that make it to market, Luby said, are getting priced and moving quickly.
Given the time of year, issuers will be watching the market closely to see if they can "tiptoe in" with a last-minute or postponed deal.
"This is an opportunity for income-oriented investors to selectively take advantage of higher yields," Luby said, especially if they're duration-sensitive. Because of the extreme volatility and geopolitical uncertainty, "most buyers are going to be nibbling at the deals ... and that's a more prudent approach to the volatility than just saying, 'No, I'm going to wait till it's over.'"
New-issue market
In the primary market Tuesday, BofA Securities priced for the North Carolina Housing Finance Agency (Aa1/AA+//) $350 million on non-AMT home ownership revenue bonds, Series 62, with all bonds priced at par — 3.95s of 1/2028, 4.3s of 1/2031, 4.3s of 7/2031, 4.95s of 1/2036, 5s of 7/2036, 5.375s of 7/2041, 5.6s of 7/2046, 5.7s of 7/2051 and 5.75s of 7/2056 — except for 7s of 1/2058 at 4.86%, callable 7/2034.
BofA Securities priced for the Regents of the University of Colorado (Aa1//AA+/) $145.665 million of university enterprise revenue bonds. The first tranche, $108.885 million of Series 2026B-1 bonds, saw 5s of 6/2028 at 3.76%, 5s of 2031 at 3.98%, 5s of 2036 at 4.38%, 5.5s of 2041 at 4.85%, 5.5s of 2046 at 5.11% and 6s of 2051 at 5.12%, callable 6/2035.
The second tranche, $36.78 million of Series 2026B-2 refunding bonds, saw 5s of 6/2027 at 3.73%, 5s of 2031 at 3.98%, 5s of 2036 at 4.38%, 5.5s of 2041 at 4.85%, 5.5s of 2046 at 5.11% and 6s of 2051 at 5.12%, callable 6/2035.
In the competitive market, Thornton, Colorado, (Aa2/AA+//) sold $200.165 million of water enterprise revenue bonds, to Wells Fargo, with 6s of 12/2027 at 3.75%, 6s of 2031 at 4.04%, 6s of 2036 at 4.44%, 5.25s of 2040 at 4.87%, 5.125s of 2047 at 5.21%, 5.25s of 2051 at 5.31%, and 5.125s of 2056 at 5.40%, callable 12/2036.
