Primary bond market

Issuance has increased, but financial performance and ratings are likely to stay volatile.

Munis posted losses in April, returning negative 1.24%. The asset class is also seeing losses of 1.62% year-to-date.

The deal, originally planned at $1.5 billion in three maturities, was downsized and restructured and then restructured again into one 10-year bullet maturity.

While munis were steady Tuesday, yields have risen over the past several weeks as "larger supply is part of a strong [year-to-date] trend for tax-exempts," said Matt Fabian, a partner at Municipal Market Analytics.

Preliminary issuance figures for April are at $39.39 billion, up 18% from April 2023.

"Bond market investors are all wishing that April was behind us as they are anxious to hear the Fed's statement at its next FOMC meeting," noted BofA Global Research. "The statement should be no surprise as the market consensus has converged to 'higher for longer' rates.

Inflows returned to muni mutual funds as investors added $200.3 million for the week ending Wednesday after $1.474 billion of outflows, according to LSEG Lipper.

It's a big week for the Fortress-backed train company, which refinanced more than $4 billion of debt and broke ground on its West Coast high-speed line.

"Just like the ATM became an additional transaction channel in the banking industry, I believe distributed ledger technology will provide municipal issuers with a similarly valued tool to sell their bonds," said Rick Coscia, Quincy's Strategic Asset Manager.

The "impressive" investor appetite for tax-exempts has been "holding steady all quarter despite expensive valuations, supply surges and periods of low reinvestment demand," said GW&K Investment Management strategists in a report.