Securitization

The central bank will disclose information on a monthly basis about its Term Asset-Backed Securities Loan Facility and its Paycheck Protection Program Liquidity Facility.

The Fed on Monday essentially said it was standing 10 feet back from the market, allowing it to manage the pandemic-driven crisis itself. Lower-rated issuers may benefit most from the facility.

High-grade trading Friday showed the disparate credit picture that investors are facing; they now need to dig deeper into municipal financials and the backstops on certain bonds.

In the midst of issuer credit deterioration due to coronavirus, muni yields fell and new-deals were priced on the heels of California's $54 billion deficit news.

Primary deals are now coming at tighter spreads to the secondary than they have recently. Cooler heads are appearing on the institutional side, but ICI reports $1.7 billion pulled from muni market mutual funds.

Continuing the firm’s national expansion, HJ Sims announced it is opening offices in Chicago and Orange County, Calif.

A premarketing wire indicated the deal could price at spreads 300 basis points north of benchmark yields. In Monday's trade, the rally begun last week continued.

Taxable munis hold the distinction as being the largest positive sector year-to-date, up 2.81%. High-yield has been hammered, losing 10%.

A range of technical issues — from month-end accounting and financing to spread widening, price volatility and the coronavirus impact on businesses and the economy — spurred a tone of relative quiet in Thursday's trade.

William Sims, managing principal, and Jim Bodine, executive vice president, of Herbert J. Sims & Co., offer some perspective and proportion around the impact of COVID-19 on the senior living industry and associated investments.

The primary, meanwhile, digested a massive $1.12 billion bond offering from New York Power Authority. The entire deal was structured to mature later than 2045 and a good portion of it was designated green bonds.

The market isn't facing 50-basis-point swings, but its footing is still off as participants grapple with the long-term effects of the pandemic. New deals are getting pulled and New York Power is about to issue bonds maturing in 2060.

The municipal bond market will see more supply hit the screens this week as buyers await much needed issuance and sellers hope for improved liquidity.

Rate volatility is still evident on the buy side of the municipal market as bid wanted lists reflect redemptions or portfolio restructuring by investors, analysts said.

The municipal market kept with a cautious tone on Thursday as the new-issue market continues to digest deals.

Bryan Garcia and Eric Shrago of the Connecticut Green Bank, explain how “Green Liberty Bonds” will expand clean energy investment. The small-denomination munis for retail, modeled after the World War II Series E bonds, are independently certified to fight climate change. Chip Barnett hosts.

The municipal market saw a plethora of deals come in while secondary market trading showed some weakness on AAA benchmarks.

Secondary market trading showed yields rising slightly, but the primary market again showed signs of life, as demand for the asset class seems to be gaining ground.

A stratified credit differentiation can be expected to linger for the foreseeable future until revenue streams in sales-tax and other project-backed bonds are more fully restored. Pension obligation bonds are back in California.

While many new-issues are still on the day-to-day calendar for next week, more are being slated to price on specific days, signaling that dealers and issuers are ready to again test the primary.