Buy side

Most of the selling during tax season happens on the front end of the curve, said Wesly Pate, senior portfolio manager at Income Research + Management.

The Washington refunding deal is built on an extraordinary optional redemption of Build America Bonds despite criticism from investors who hold them.

The extraordinary redemptions being used to call Build America Bonds "are based on a creative but flawed legal argument driven by the current change in interest rates," said Kramer Levin partner Amy Caton.

Citi's exit comes amid the larger trend of broker-dealers downsizing balance sheets, which can hurt secondary market liquidity, particularly in times of stress. Other market players are coming into the fold.

Narens' hiring complements Stifel's public finance practice and the types of deals the firm is doing, said Betsy Kiehn, managing director and head of Stifel's Municipal Capital Markets Group.

Market participants said it is yet to be seen whether issuers will pull back their BABs refundings due to concerns after several bondholders sent a letter to the trustee on a Regents of the University of California deal, saying it was "prohibited" from executing the redemption.

High-yield and taxable munis continue to outperform, supply grows but concentrates in larger deals led by $3 billion of state personal income tax revenue bonds from the Dormitory Authority of the State of New York next week.

One investor is offloading the debt, while another sees an opportunity.

Several investors in a challenge to a University of California Regents Build America Bonds redemption "may give issuers additional reason for pause when vetting similar refundings," J.P. Morgan strategists said.

Harvard and Princeton coming to market is a "huge sign of confidence," said Clare Pickering, a Barclays strategist.

Large deals were repriced to lower yields while the secondary market was lightly traded, leading to little changed triple-A yield curves and underperformance to Treasury market gains. Despite a growing calendar, the supply demand imbalance remains with much cash on the sidelines.

High rates and high inflation, coupled with rich reserves, pushed off or delayed issuers coming to market in 2023, noted James Pruskowski, chief investment officer at 16Rock Asset Management.

This decision will accelerate foreign buyers' reduced presence in the muni market, said Vikram Rai, head of municipal markets strategy at Wells Fargo.

David Brownstein, who helped Jefferson County, Alabama, and Detroit return to market after bankruptcy, has opened a new firm that is advising the Oversight Board on its plan of adjustment for PREPA.

Some participants on the Street estimate that SMAs hold as much as $1.5 trillion of munis while others peg it closer to $1 trillion to $1.3 trillion.

Chad Wildman, executive director, Quantitative Strategies at FMSbonds, and Matthew Smith, founder and CEO of Spline Data, discuss how automation has repositioned the muni market and where participants can find value by using technology tools. Lynne Funk hosts. (45 minutes)

A congressional hearing last week underscored the risk of havoc-based cyberattacks, particularly from China, said Hilltop's Tom Kozlik.

Interest rates and federal elections hang heavy over the industry and municipal analysts believe certain muni sectors or subsectors will experience credit deterioration.

As ridership remains low, investors are closely watching for new funding streams and credits like the MTA's planned congestion tax-backed bonds.

The top two municipal bond insurers wrapped $31.845 billion in 2023, up 10.4% from the $28.847 billion of deals in 2022, according to Refinitiv data.