Public finance

Supply falls ahead of the final Federal Open Market Committee meeting of 2024 and the holidays but issuance still breaks records. The lighter calendar should provide support for the secondary market in the final weeks of the year.

The action was taken ahead of a bond sale for a controversial 15-year expansion program that is currently estimated to cost $8.2 billion up from $5 billion.

The face amount of munis outstanding rose to $4.171 trillion, a 0.8% increase from Q2 2024 and 2.9% from Q3 2023, according to the latest Fed data.

Something less than $400 million of the bonds will be taxable bonds.

Muni mutual funds saw outflows after 23 weeks of inflows as LSEG Lipper reported investors pulled $316.2 million for the week ending Dec. 11. High-yield municipal bond funds, though, saw inflows of $192.3 million.

The continued delay in resolving the case raises constitutional concerns, a bondholder attorney said.

The president of St. Augustine University in North Carolina called the loan a "necessary evil" as it fights to remain solvent and accredited.

Most on the Street expect issuance to come in around $500 billion, but a few think volume will be much higher, primarily because of potential changes to the tax exemption. Most firms expect refunding volumes to also grow in 2025.

Brad Briner said the state may need to issue short-term debt in the near future to pay for Hurricane Helene expenses.

Municipal investors are more focused on the final new-issues coming down the pike and repositioning books as 2024 heads to a close. ICI reported another week of inflows into municipal bond mutual funds.

Operator ports, which rely on shipping volume for revenue, are more exposed to trade policy shifts than landlord ports, analysts said.

The lowest-rated municipalities in the state are benefitting the most from current economic tailwinds, Moody's reports.

Wednesday marks the 10-year anniversary of Detroit's exit from bankruptcy. Its Chapter 9 declaration in 2013 was the largest municipal bankruptcy in the U.S.

The top five bond financings came in above $5 billion.

Suffolk's improved finances won the county its third rating upgrade this year.

"With strong demand, rate cuts and favorable technicals, the muni market — outside of an unexpected shock — is set up to perform well over the next couple of months," said Daryl Clements, a municipal portfolio manager at AllianceBernstein.

Calling it a "tragedy" for residents, without a negotiated setllement resolution could be years away, mediators said.

The rating agency cited an easing of the state's fiscal challenges for lifting the outlook on the state's Aa2 rating to stable from negative.

Bond Buyer senior reporter Keeley Webster hosted a wide-ranging discussion on the state's fall bond slate, housing, and second-term priorities with California Treasurer Fiona Ma and Deputy Treasurer of Public Finance John Sheldon.

A circuit court judge earlier this year struck down the law prohibiting state and local government contracts with firms "boycotting" the fossil fuel industry.