Primary bond market

The New York City Transitional Finance Authority plans to make an impact on the municipal market this month with $1.8 billion of bond sales.

S&P Global Ratings primarily cited a "precipitous decline" in unrestricted cash to explain its triple-notch downgrade of the system.

"Apathy and caution" were the theme of the past week, said Birch Creek strategists.

Wisconsin will be in the market Wednesday with $253.9 million of general obligation bonds, with some proceeds funding the Blatnik Bridge replacement project.

The $2.5 billion Brightline West and $849 million Hawaii deals stood out among the rash of issuances last month alongside the ongoing tax exemption debate.

New York City leads the negotiated calendar with $1.4 billion of GOs, followed by the Regents of the University of California with $1.2 billion of general revenue bonds.

While UST yields rose up to five basis points out long Thursday, the current rally "that has taken the 30-year UST closer to where the 10-year yield traded a week ago has not impacted the same range in munis," said Kim Olsan, senior fixed income portfolio manager at NewSquare.

The planned fiscal 2026 increase in bonding is expected to continue for several years.

Chicago's City Council on Wednesday approved the sale of $830 million of general obligation bonds that Mayor Brandon Johnson says will fund infrastructure improvements.

The MTA took a victory lap on congestion pricing, presenting new data and rebuking the "existential threat" from the White House. 

It has been a bit of a "heavy start" to the year for issuance, said Jeff Devine, a municipal research analyst at GW&K.

Muni prices continue to "show relative resilience" despite a nearly record pace of issuance, said Matt Fabian, a partner at Municipal Market Analytics.

Last week, "there was no meaningful economic data to digest and yields were slightly lower," said Daryl Clements, a portfolio manager at AllianceBernstein.

The unpredictable nature of legislating leads most to holding off on disclosure changes until a bill becomes a law.

Most states and sectors in the region beat their 2023 issuance by wide margins in 2024. 

Market activity has been somewhat "subdued," and USTs yields have been "relatively well-behaved," though the 10- to 30-year rates have slightly underperformed, moving up three to five basis points, said Barclays strategist Mikhail Foux.

The Trump administration singled out the Las Vegas-Los Angeles bullet train for praise Thursday, the same day the deal priced.

Investors added $546.3 million to municipal bond mutual funds in the week ending Wednesday, following $238.5 million of inflows the prior week, according to LSEG Lipper data.

The bonds are to be sold competitively in April.

The Investment Company Institute reported outflows of $336 million for the week ending Feb. 12, following $852 million of inflows the previous week.