Buy side

Volume will drop below $6 billion in the coming week as new issuance tapers off after observance of Memorial Day on Monday.

The market for Florida debt is holding up in the face of a possible government shutdown, while the Chicago market is being penalized with wider spreads, higher yields, and a swell in bid-wanted lists after being downgraded to junk.

The weekly average yield to maturity of The Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, increased four basis points to 4.45% for the week ended May 21 from 4.41% in the previous week.

Municipal credit prospects may be clouded for the next several years by underfunded pension obligations and a possible uptick in bankruptcies, according to panelists at a forum in New York.

The closure of the Treasury SLGS window has added a degree of difficulty to some refunding deals.

It will be yet another busy week in the primary market as issuers continue to take advantage of the current low interest rate environment. Long-term municipal bond volume for the week of May 18 is expected to total roughly $9 billion, according to estimates from Ipreo and The Bond Buyer.

For the week ended May 14, the weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, increased two basis points to 4.41% from 4.39% the previous week.

Expect more downgrades for Chicago after Moody’s Investors Service dropped the city to junk, creating new liquidity concerns, warns Nuveen Asset Management LLC.

For investors with risk tolerance, uninsured senior COFINA bonds are attractive compared with other island debt as well as COFINA’s own subordinate debt, Barclays analysts said.

State Rep. John McGinnis wants to shorten the Pennsylvania pension amortization period from 30 years to 20.

The municipal market’s credit and rate volatility last month could produce buying opportunities, according to a report from BlackRock Inc.

Weekly volume is estimated to come in at $8.4 billion, with the Salt River Project agricultural improvement and power district's $833 million of electric system revenue bonds leading the way. The state of Connecticut is coming with $500 million of GO bonds and the PA turnpike commission is scheduled to come with $494.56 million of turnpike revenue bonds.

The weekly average yield to maturity of The Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, increased nine basis points to 4.39% in the week ended May 7 from 4.30% in the previous week.

Default rates are far higher for corporates than for munis with the same ratings, a discrepancy regulators are hoping to address with a rule that takes effect June 15.

Lumesis Inc. has formed a strategic relationship with Pershing LLC that will give immediate access to DIVER Advisor’s municipal bond reports and compliance solutions to Pershing’s clients.

Tim McGregor, director of municipal fixed income management at Northern Trust, says volatility is creating opportunities.

Municipal bond volume is expected to rebound to more than $9 billion in the coming week, as issuers take advantage of post-tax season demand.

For the week ended April 30, the weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, increased four basis points to 4.30% from 4.26% from the previous week.

Chicago’s CFO, Lois Scott, is promoting the city's new plan to take on $200 million of new debt to pay for canceling interest-rate swaps and to phase out debt restructurings.

After 42 years at Moody's Investors Service, John Incorvaia is retiring after spending most of his analytical career covering Florida. April 30 is his last day on the job.