Primary bond market

Barclays' Mikhail Foux talks shifting demand, BABs refundings, election effects and what it means for the asset class in a volatile market.

April continues to be "harsh" for munis as the asset class has given up roughly 72 basis points in the first two weeks of the month, said Jason Wong, vice president of municipals at AmeriVet Securities.

"We were originally thinking that we would offer five-, seven- and 10-year maturities, with $500 million in each tranche. But we decided today to just offer 5s and 10s — $500 million of five-year bonds and $1 billion of 10-year bonds," said Ben Watkins, Director of Florida's Bond Division.

New York City Municipal Water Authority returns to the municipal primary after a $1.4 billion deal earlier this year.

In a week marked by inflation and jobs data that made clearer the Federal Reserve will not be cutting rates nearly as much or as many times as some had expected even a week ago, Friday's headlines further complicated the landscape for investors and munis have had little choice but to go along for the ride.

The top two municipal bond insurers wrapped $7.132 billion in the first quarter of 2024, up from the $5.735 billion of deals in the first quarter of 2023, according to LSEG data.

Municipal bond mutual funds saw the seventh consecutive week of inflows and the 14th week of inflows for high-yield funds.

The pace of the issuance and the increase of refundings, surging 59.6% in the first quarter of 2024, have also led some firms to up their overall 2024 issuance projections.

Despite an S&P rating upgrade ahead of this week's GO bond deal, Louisiana paid a wider spread to a 10-year benchmark than it did a year ago. Longer maturities saw tighter spreads on from a year ago.

"The news is sparking an equity market selloff while sending bond yields to the stars as investors dial down their Fed easing expectations again, this time to only two rate cuts this year," said José Torres, senior economist at Interactive Brokers.