Primary bond market

Proceeds from the deal, along with additional monies, were to have been used to fund the costs of the Royal Caribbean Cruises' campus project as well as a debt service reserve fund.

Munis yields fell nine to 12 basis points, depending on the curve, but underperformed larger gains along the UST curve. Large new-issues began pricing.

The deal will finance construction of an 800-room convention headquarters hotel as part of a wider expansion of the facility.

November "continues to be off to a strong start as yields have fallen an average of 34 basis points across the curve since the start of the month," said Jason Wong, vice president of municipals at AmeriVet Securities.

Flush with bond authorization from the Nov. 7 election, officials are formulating issuance plans, while Colorado's governor called lawmakers back to session after a property tax cut measure was defeated by voters.

"As with most fast rallies there are sessions when the market pauses to assess where fair value should play out," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Municipal Market Analytics noted the current size of the outstanding TOB market — at about $50 billion from highs of nearly $500 billion before the Financial Crisis — reflects a reduced credit concentration risk and lower overall leverage.

A constructive trading session in the secondary aided a busy primary once again as investors appear to be more engaged in the asset class.

California and Washington sold four large refunding GO deals in the competitive market while several deals of size priced in the negotiated market led by a $650 million for Arizona's Salt River Project. A constructive secondary led yields to fall three to five basis points.

The upgrade brings Illinois up to the A-minus level across the board. The state had three BBB-minus or equivalent ratings as recently as July 2021.

The recent rally is good news for munis, which have "posted a total-negative return loss for three straight months," said Jason Wong, vice president of municipals at AmeriVet Securities.

While it's been a tough year across fixed-income generally, a Wall Street muni retrenchment marks an opportunity for regional and middle-market firms to gain more of a foothold, market participants said.

Friday's employment report was good news for the Federal Reserve, with fewer jobs created and a smaller rise in earnings, leading analysts to cautiously increase expectations that the hiking cycle is over.

Washington will auction $483 million in two tranches on Tuesday.

"The lack of standardization is a very real problem that impacts all facets," said Ted Chapman, managing director and investment banker at Hilltop Securities.

Triple-A muni yields fell 10 to 14 basis points while UST saw gains of up to 16bps out long as market participants consider a potential end to Fed rate hikes.

"The big question is: who's next? I don't think UBS is the end," said a veteran sellside market participant.

Municipals closed out October in the red, the third consecutive month of losses for the asset class.

While the FOMC statement will likely have very few changes, the post-minutes release press conference will be the wildcard.

The deal has new-money and refunding components and is expected to hit the market in a negotiated sale the week of Nov. 13.