Capital markets

Cabrera Capital Markets is welcoming three new public finance hires who are joining the firm from UBS: Shawn Dralle, Shawnell Holman and Chris Bergstrom.

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

The rating agency cited the university's structural budget imbalance and management turnover among factors that drove the outlook revision to negative from stable.

The muni market "exhibited similar themes from the past few weeks as extremely rich valuations and the upcoming unfavorable supply/demand picture have led to a measured buyer base," said Birch Creek Capital strategists in a report.

The San Diego Community College District is among those joining the trend of buying back bonds in a tender to refund for savings.

The bank has also hired some analysts to its infrastructure group over the past several weeks as it plans to beef up its muni team.

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.

Analysts say states can avoid short-term issues as a result of strong reserves but some may face challenges over the longer term.

Three of the hires are group heads in public sector and structured finance businesses at the firm.

Extreme weather could aggravate growing property insurance pressures on governments.

The authority is one of the few investment-grade U.S. issuers actively selling triple-tax-exempt paper.

Based in New York City, Ted Hynes has almost 40 years of experience in the fixed-income markets, the last 15 at Raymond James.

More organizations are planning bond sales, although technical factors related to the election may mean deals come early in the year.

S&P cited budget pressures that have not been counterbalanced by new revenue growth when lowered the outlook on the city's BBB-plus rated GO bonds.

Pensions funds are increasingly investing in riskier asset classes, with more than half their investments in 2022 in these, according to some estimates.

All municipal bond insurers wrapped $35.381 billion in 2023, a 5.8% increase from the $33.428 billion insured in 2022, according to LSEG data.

Bond volume fell slightly, as volatility, higher interest rates, falling pandemic aid and slower economic growth kept issuers on the sidelines.

"Tight underwriting spreads in 2023 followed, for the most part, a well-entrenched trajectory that has backdropped the primary municipal market for years, and so the negligible bump in spreads does not come as a surprise," said Jeff Lipton, managing director of credit research at Oppenheimer.

Moody's Investors Service placed the university under review for downgrade, citing in part debt that would be issued to purchase the University of Phoenix.

Fitch said its upgrade "reflects the removal of the asymmetric additional risk relating to potential general fund exposure to the county's enterprise sewer system … which reflects the system's recent restructuring of its outstanding debt."