Capital markets

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).

Illinois will sell up to $1.1 billion of general obligation refunding bonds and $600 million of taxable and tax-exempt GO bonds by the end of September.

The $180.24 million deal comprises $76.085 million of metropolitan district bonds and $104.155 million of consolidated public improvement bonds.

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 bank was one of 225 credits Moody's placed on review for possible upgrade July 25 when it released a revised rating methodology.

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

Chicago will bring to market $1 billion of bonds for O'Hare International Airport, part one of a three-phase financing plan for 2024.

The East County AWP Joint Powers Authority plans to construct a water reclamation project using the debt.

Mount Saint Mary College in New York saw its bond rating downgraded to BBB from BBB-plus by Fitch Ratings after persistent declines in student enrollment.

While the nonprofit hospital sector shows signs of stabilizing, Houston-based Texas Children's Hospital faces fiscal problems that led to two rating downgrades.

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.

New Jersey is poised to sell up to $2.4 billion of bonds for its transportation infrastructure, according to a report from Fitch Ratings. 

Clyde, Texas, missed payments on certificates of participation due Aug. 1, the same day it declared a water emergency. Bond insurers are paying the holders.

New York state's issuers topped the Northeast charts as issuance rose in nearly every sector of the market during the first half of 2024.

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.

Long-term liabilities have gone down and revenues have gone up, Fitch said.

Underwriting spreads rose to $7.11 in the first half of 2024 from $3.70 in the first half of 2023.

The Investment Company Institute reported $839 million of inflows into municipal bond mutual funds for the week ending Aug. 7 after $442 million of outflows the week prior. Exchange-traded funds saw $680 million of inflows after $950 million of inflows the previous week.

Moody's sees strength in New Jersey's economy and governance.