Securitization

New-issue volume has topped $50 billion over the past few weeks, said AllianceBernstein in a weekly report.

Falling occupancy figures, staffing shortages, and rising labor costs have elevated the sector's risk, with Greenwich Investment Management's bankruptcy yet another example of how the sector requires thorough credit analysis.

This week's surge in issuance, which tops $14 billion, is "likely going to keep a lid on any enthusiasm," Birch Creek strategists said in a weekly report.

While particpants expect some pressure in the near-term with more than $16 billion on tap, they also say the current yield and ratio levels offer investors opportunity.

Despite losses, munis are "being set up nicely" as the summer season approaches, said Jeff Lipton, a research analyst and market strategist.

Muni yields rose up to 13 basis points Wednesday, depending on the curve, coming on the tailwind of a market correction, said Brad Libby, a fixed-income portfolio manager and credit analyst at Hartford Funds.

SMA growth has been "pretty staggering to see," said Matthew Schrager, managing director and co-head of TD Securities Automated Trading, noting the "interplay between SMA and electronic trading is a very symbiotic relationship."

Munis sold off last week "as the anticipated market correction may have finally started ahead of the summer reinvestment period," said Jason Wong, vice president of municipals at AmeriVet Securities.

A pair of muni market experts propose cities and towns borrow through state-based, credit-enhanced bond banks to make the market more efficient.

Marty Mannion and Matt Schrager, managing directors and co-heads at TD Securities Automated trading division, discuss how automation and electronic trading are creating more opportunities and better outcomes for municipal market participants, including making muni bonds more accessible to a broader range of investors.