Primary bond market

Boys Town, Nebraska, home of a high-profile sanctuary for troubled kids, heads into the bond market after a two-notch downgrade and recent abuse claims.

Confidence in the muni market is "well placed," said Matt Fabian, president of Municipal Market Analytics.

Improved risk sentiment after the capture of Venezuelan President Nicolás Maduro helped pull investors into all markets and munis are a "beneficiary" of that shift, said James Pruskowski, an investor and market strategist.

The Maine Municipal Bond Bank is bringing back its transportation revenue bond program, with a few changes to bolster the bonds' credit. 

With the muni calendar "heating up" ahead of another projected year of record issuance, Jeff Lipton, The Bond Buyer's market intelligence strategist, expects "investor demand to comfortably digest the new supply given reinvestment needs and compelling yield and income opportunities."

Oregon transportation bond payments protected even if tax repeal succeeds, rating agencies say.

Municipal bond issuers are on tap to sell about $6 billion of new issues in early January, but there should be plenty of money from maturing issues and interest payments to easily absorb that amount, as well as volume going forward, says Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

The Federal Open Market Committee meeting minutes showed the decision was closer than the vote indicated, with "a few" voters suggesting they would have supported no change at the meeting.

The muni credit market has experienced headwinds this year, including "potential federal funding cuts, the impact of tariffs and sector-specific pressures," said Goldman Sachs strategists

The New York State Thruway Authority's $848 million refunding features a voluntary tender process.

The muni bond market stands at an "inflection point," said Nuveen strategists in a 2026 market outlook.

"A stagnant yield curve is resulting from supply having wound down and munis drawing steadiness from a likewise calm UST market," said Kim Olsan, senior fixed income portfolio manager at NewSquare Capital.

It was a "confusing, volatile year, and the states face growing threats in 2026 and thereafter," said Matt Fabian, president of Municipal Market Analytics.

Following the September/October rally, munis have been relatively steady in November and December, with direction and magnitude of rate change in the UST market driving underperformance or outperformance, said J.P. Morgan strategists led by Peter DeGroot.

Supply for the final two weeks of the year will be virtually nonexistent, with only one deal, $24.46 million of taxable multi-family/project bonds from the Colorado Housing and Finance Authority, on the calendar for next week.

The Equitable School Revolving Fund, which has more deals in the works, has maintained its strong credit profile even as the sector has experienced headwinds.

Muni yields were bumped a basis point, while UST yields fell two to four basis points.

"Once this week is done, that's it for the year. The following week is Christmas, and then after that, the new year," said Jeff Timlin, a partner at Sage Advisory.

The Ohio State University went to market Tuesday with a $560 million deal to refund taxable Build America Bonds into tax-exempt debt.

Inflation reports may drive markets in 2026 since the labor market is "sending mixed messages," said Kevin O'Neil, associate portfolio manager and senior research analyst at Brandywine Global.