Primary bond market

Rich ratios focus buyers' eyes on a primary market that simply doesn't have enough supply to keep up with demand.

High-yield continues to be sought after as high-grade paper is yielding about 0.70% in 10 years and 1.40% or lower in 30 years and credit spreads continue to tighten in nearly every sector. Ratios are near 20-year record lows.

Acacia and Estrada grew substantially.

McCall Parkhurst & Horton and Norton Rose Fulbright moved up in 2020 to second and third.

It is most certainly an issuers' market as rates are low, credit spreads continue to tighten, money pours into municipal bond mutual funds at record levels and a net negative supply of more than $11 billion.

Issuance dropped 26.7% in January, tax-exempt issuance fell 32.6% while refundings and taxables saw smaller declines. Part of the drops were due to the typical nature of lighter January issuance but also issuer anticipation of potential federal aid to combat the pandemic.

The junk-rated district that is managing the COVID-19 pandemic's fiscal impact with the help of federal relief trimmed spread penalties as investors were drawn to the extra yield offered for the junk paper.

Chicago Board of Education bonds were repriced to lower yields by as much as 37 basis points, showing just how far investors will go for any incremental yield.

Fed chair says it's unlikely there will be "troubling inflation" any time soon, and rates will stay low and asset purchases will continue at current levels. ICI reports another $3.24 billion of inflows as munis follow UST to lower yields.

New issues priced with ease with high-grade issuers tight to triple-A benchmarks. It was the first time the municipal yield curve saw such noticeable movement, following little changed secondary activity for nearly the past two weeks.

Federal COVID-19 relief aid cushions the district's balance sheet but labor, state budget, and pension woes remain.

Returns of all the investment grade options "pale in comparison to those for municipal high-yield," which should bolster Texas gas and Chicago public schools deals.

The $187 million deal is the largest yet to be hosted on the Clarity platform, which is approaching the half billion mark of resets every week.

With interest rates at historic lows and stock market returns at record highs, Tucson sees a ripe opportunity to issue pension debt.

A 'perpetual calm' continues to fall over the municipal market as inflows into municipal funds, combined with the shortage of traditional tax-exempt supply, is directing most aspects of daily market activity.

Refinitiv Lipper reports another multi-billion week of inflows, the domino effect from such strong flows is that secondary selling doesn’t need to be so active, creating fewer opportunities for new inquiry, analysts say.

Muni yields have been in a nine-basis point range since the beginning of the year while UST yields have fluctuated more than 20 basis points. With so little supply, muni credit spreads continue to compress.

Tax-exempt performance is dependent on what supply looks like versus taxables. The 30-day visible supply shows more than 30% taxables on tap, though some analysts say the taxable increase makes exempts more attractive.

Friday’s data showed economic weakness. Consumers, the drivers of the economy, pulled back during the holiday season and have exhibited weakening sentiment.

The bonds are coming in three tranches, mixing tax-exempt new money and a taxable refunding.