Buy side

Municipal supply continues to grow as Bond Buyer 30-day visible supply sits at $20.02 billion and the municipal market will see one of the largest weeks of new-issuance at an estimated $13.35 billion, led by three billion-plus deals from Washington, D.C. ($1.6 billion), the New York City Transitional Finance Authority ($1.5 billion) and Illinois ($1 billion).

As extreme weather events occur with more frequency across the country, Michael Gaughan, executive director of the Vermont Bond Bank, says municipal bond banks can help smaller communities deal with the effects of them. Gaughan speaks with The Bond Buyer's Lynne Funk on the effects of climate change and how the various levels of government can work together to address it.

Investors will see more than $7.8 billion of supply to start off September, following a record issuance month in August. The calendar is led by the North Texas Tollway Authority's $1.126 billion of system revenue refunding bonds while high-grade Massachusetts leads the competitive slate with $850 million of exempt and taxable general obligation bonds.

The sale follows the utility's successful initiation of two nuclear power units in the last 13 months.

ICE's and MarketAxess's networks are "complementary," said Peter Borstelmann, president of ICE Bonds, as the former is "deep and rich" in the retail wealth segment, while the latter is "deep and rich" in the institutional space.

The calendar next week largely continues "the elevated pace of primary market volume seen since May, against a backdrop of broadly supportive fund flows (LSEG inflows for eight consecutive weeks), somewhat better dealer positions (although still heavy), mid-August reinvestment to spend, but lighter late summer attendance," said J.P. Morgan strategists led by Peter DeGroot.

In this episode, Howard Cure, Director of Municipal Bond Research at Evercore Wealth Management, discusses the improving state of public pensions, the ongoing challenges faced by states like New Jersey and Illinois, and the risks associated with pension obligation bonds.

At $1.8 billion, the tax-exempt and taxable deal is the largest on the calendar this week and it's the latest offering from the city since a $1.2 billion refunding issuance in July. 

As investors contemplate rate policy for the remainder of 2024, "there have been a few strategies from which to choose to boost yield — short positioning, curve extension and credit quality," noted Kim Olsan, senior fixed-income portfolio manager at NewSquare Capital.

Municipal bond mutual funds saw inflows as investors added $528.7 million to funds after $674.1 million of inflows the week prior, according to LSEG Lipper. This marks seven straight weeks of inflows.