Sell side

The muni market finances the "fabric of our nation, and now, because of Citi's exit, the cost of financing for state and local governments is going to go up," a sell-side source said.

"Higher education is going to be facing continued challenges in the near term," said Tom Kozlik, managing director at Hilltop Securities.

Final responses are due by Dec. 8 from muni underwriters who want to be on Wisconsin sale syndicates.

Jaime Alvarez, who joined the Oregon State Treasury from Houston in 2021, was named the state's director of debt management in October.

Attorney General Ken Paxton put several big banks under a review last month, raising concerns more municipal bond underwriters could be driven out of the state.

Teacher shortages and enrollment declines due to growing charter and private schools are two of the problems affecting school financing.

Washington will auction $483 million in two tranches on Tuesday.

"The big question is: who's next? I don't think UBS is the end," said a veteran sellside market participant.

Large reserves will insulate states against downgrades in the near future, one rating agency says.

The data indicates that 2023 could be "the potential start of a long-feared trend toward more higher ed impairments and, possibly, defaults," MMA's weekly Outlook report said.