Primary bond market

The tax-exempt market is expected to be "biased higher" in the coming weeks and months as the expected heavy pace of issuance this month will not be as "oppressive" as feared, said Pat Luby, head of municipal strategy at CreditSights.

"I've never seen this level of hand wringing at the issuer level," said Matt Boles, managing director at RBC Capital Markets.

Demand may strengthen as "investors anticipate the Federal Reserve's likely path of rate cuts, which would drive yields even lower," said Tom Kozlik, managing director and head of public policy and municipal strategy at HilltopSecurities.

The bonds are rated A-plus by three ratings agencies and are expected to have serial maturities from 2026 to 2055.

"The story remains the same: solid demand is more than enough to take down the sizable new issue supply," said Daryl Clements, a portfolio manager at AllianceBernstein.

The Dormitory Authority of the State of New York and New York City both saw billion-dollar-plus deals oversubscribed. 

The new-issue calendar is at $15.637 billion and boasts four mega deals.

Among those approved is a $117 million variable rate demand bond expected to be marketed late this year.

Earlier Thursday, the market was "chugging along, doing OK, just kind of nothing, in between slight strength to modest upticks, but the narrative changed when that bank news came out. The market really ran pretty quickly," said Chris Brigati, managing director and CIO at SWBC.

"In theory at least, municipal yields should be able to stabilize here; levels remain attractive for pure income buyers while more sustainable constructive fund inflows are just enough to speak for rising issuance in the absence of meaningful reinvestment," said Matt Fabian, president of Municipal Market Analytics.

"If I wanted to target municipal finance, this would be a really good place for me to start," said Omid Rahmani, public finance cybersecurity lead at Fitch Ratings.

As the technical picture tends to turn "more favorable" during November and December, Birch Creek strategists believe "the wider new issue concessions brought about via the heavy new issue calendar will likely be rewarded."

The average weekly issuance is at least $10 billion, said John Flahive, head of investment solutions and co-head of municipal bonds at Insight Investment.

The county awarded $215 million of general obligation limited tax bonds for a jail project with uncertain future funding to lowest bidder BofA Securities.

The Fayetteville Public Works Commission bonds are to be priced competivitely Oct. 21.

Municipals are impacted by fluctuating supply and demand influences more than most other markets, said Jeff Timlin, a partner at Sage Advisory.

Carving up risk allows buyers who normally shy away from junk bonds to buy the pooled securities.

The Pennsylvania healthcare system is touting plans to grow its network as it funds an expansion for its largest hospital, in York.

The large issuance of munis this year, up 12.9% year-to-date, "disadvantaged" the asset class compared to other U.S. fixed income assets for a majority of 2025, said Pat Haskell, head of the municipal bond group at BlackRock.