Primary bond market

Deep-in-the-red municipal returns are not helping assuage investor concerns, creating a negative feedback loop that has yet to see a pause.

Assuming the taxable and tax-exempt rates are highly correlated (and in fact they are), we can show that the expected cost of a fairly priced callable bond exceeds that of an optionless bond.

Last year the university's investment portfolio grew by 47%, a factor contributing to the university's triple-A ratings.

Despite compelling yields and ratios, buyers continue to be selective. Even if rates stabilize, municipal investors will likely be cautious for some time, waiting for fund outflows to abate, strategists said.

Fitch Ratings revised its outlook on the city's AA-minus rating to positive ahead of a $1.08 billion general obligation bond sale.

The new relationship allows RIAs to access BondLink's hosted investor relations pages without having to leave InspereX's BondNav platform.

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $2.446 billion of outflows, though that was down from $2.669 billion of outflows in the previous week.

Outflows continue with the Investment Company Institute reporting $6.167 billion pulled from muni bond mutual funds in the week ending May 4, up from $5.371 billion of outflows in the previous week. 

New York Dormitory Authority school bonds and Northwell Health priced and upsized, while Wisconsin and Oregon offered general obligation bonds. Analysts say municipal curves are oversold, creating a buying opportunity.

How technology, data and transparency can aid in rough markets. Lynne Funk talks with Stephanie Sparvero of Bloomberg BVAL. (21 minutes)

Despite outsized volatility and liquidity challenges ahead, the possibility of relief for munis is not too far off, analysts say, but USTs lead the way for exempts.

Despite the pandemic, operating revenues increased 7.6% from 2019 to 2020 and 8.25% from 2020 to 2021.

Munis again outperformed U.S. Treasuries. Participants note that municipal to Treasury ratios and nominal yield levels are “extremely attractive,” which is generating some renewed interest among the retail crowd.

Shorter-dated and high-yield credit will be more likely to succeed in the current volatile environment.

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $2.669 billion of outflows, though down from $2.875 billion of outflows in the previous week.

Illinois' latest upgrade is its fourth over the last year and moves its general obligation rating three notches away from the cusp of junk, where it once sat.

Outflows continue with the Investment Company Institute reporting $5.371 billion pulled from muni bond mutual funds in the week ending April 27. Exchange-traded funds saw inflows at $1 billion.

The municipal market was marked by some skittishness among investors on Tuesday as a new month gets underway.

Municipal returns in April were deeply negative, bringing the year-to-date figure to near 9% losses, the largest posted on the Bloomberg Muni Index since its inception in the 1980s.

Illinois expects to sell about $1 billion of new-money general obligation debt but the deal could grow if market conditions permit savings on a refunding piece.