Muni primary picks up steam as large deals come to market
8 min read
Municipals were little changed Tuesday as the market focused on the robust new-issue calendar, which included several large deals. U.S. Treasuries were slightly weaker and equities ended up.
The two-year muni-UST ratio Tuesday was at 69%, the five-year at 70%, the 10-year at 75% and the 30-year at 91%, according to Municipal Market Data’s 3 p.m. ET read. ICE Data Services had the two-year at 68%, the five-year at 71%, the 10-year at 74% and the 30-year at 91% at 4 p.m.
On June 1, the market received an influx of around $27 billion during a week when new-issue supply will total around $17 billion, said Daryl Clements, a portfolio manager at AllianceBernstein.
“The summer technical is like the El Niño weather pattern — it’s always there but may be stronger or weaker from one year to the next,” he said.
This year’s summer technical will support the muni market, although there may be weakened support given outsized issuance, according to Clements.
The Bond Buyer 30-day visible supply is at $23.4 billion. There are also $61 billion of calls and maturities coming due this month, said Whitney Fitts, director of municipal portfolio management at Appleton Partners.
Given this, “we’re going to get a lot of price discovery with the big deals, a large number of deals, and then a lot of cash to put to work,” she said.
Some of these bigger deals will also be priced to sell, Fitts said.
There will also be a lot of demand this week, “so to see where that sort of equalizes will be interesting,” she said.
The summer months, Fitts said, will be very indicative of the market’s appetite to take these deals down.
The market has gotten better at timing the deals, she said.
If a deal is scheduled to price on a Wednesday, but the market’s strong on Monday or Tuesday, issuers have that flexibility to push it one way or the other, according to Fitts.
“So whether it’s accelerating the whole deal, or whether they’re potentially doing a retail and then an institutional order period and accelerating that, [issuers] are taking advantage of the market opportunities better than we used to in the muni market,” she said.
Munis are currently seeing a “mixed macro backdrop,” said Peter Block, managing director and municipal strategist at Ramirez.
Additionally, “stagflation risks, real economic and credit effects of tariffs and intergovernmental funding cuts have yet to materialize in the data,” while also the on the horizon are the fate of the 2017 Tax Cuts and Jobs Act extension in the Senate, the status of the municipal bond tax exemption, the SALT deduction limits, top marginal rates and tax brackets, Block said.
Also on tap are the June and July Federal Open Market Committee meetings with around 50 basis points of cuts currently priced in, he noted.
“The mixed macro backdrop presents a window to buy cheaper yields before the retail herd inevitably piles headlong back into the asset class and the situation reverses,” Block said. “This likely occurs once markets find equilibrium on some of the risks noted, in addition to currently fraught globalization, trade, and geopolitical relationships.”
Credit spreads are mostly “fairly valued, although various sectors appear cheap versus the broad market, while taxable high grades appear cheap versus IG-corporate counterparts,” he said.
In the primary market Tuesday, J.P. Morgan priced for the Indiana Finance Authority (Aa2/AA/AA/) $1.407 billion of Indiana University health system revenue bonds. The first tranche, $308.225 million of fixed-rate Series C bonds, saw 5s of 10/2036 at 3.99%, 5s of 2040 at 4.40%, 5.25s of 2045 at 4.77% and 5.25s of 2047 at 4.81%, callable 10/1/2035.
The second tranche, $230 million of long-term rate Series 2025D-1 bonds, saw 5s of 10/2064 with a mandatory tender date of 10/1/2029 at 3.43%, callable 10/1/2028.
The third tranche, $230 million of long-term rate Series 2025D-2 bonds, saw 5s of 10/2063 with a mandatory tender date of 10/1/2031 at 3.60%, callable 10/1/2030.
The fourth tranche, $200 million of long-term rate Series 2025D-3 bonds, saw 5s of 10/2059 with a mandatory tender date of 10/1/2033 at 3.77%, callable 10/1/2032.
The fifth tranche, $215 million of long-term rate Series 2025D-4 bonds, saw 5s of 10/2058 with a mandatory tender date of 10/1/2035 at 4.06%, callable 10/1/2034.
The sixth tranche, $50 million of long-term rate Series 2025D-5 bonds, saw 5s of 10/2054 with a mandatory tender date of 10/1/2037 at 4.30%, callable 10/1/2035.
The seventh tranche, $173.805 million of fixed-rate Series 2025E bonds, saw 5s of 10/2031 at 3.26%, 5s of 2035 at 3.77% and 5s of 2040 at 4.40%, callable 10/1/2035.
Wells Fargo priced for the Board of Regents of the University of Texas System (Aaa/AAA//) $692.015 million of revenue financing system refunding bonds, with 5s of 8/2027 at 2.81%, 5s of 2031 at 3.03%, 5s of 2035 at 3.53%, 5s of 2040 at 4.12%, 5s of 2045 at 4.56% and 5s of 2051 at 4.81%, callable 8/15/2035.
Jefferies priced for Los Angeles (/AA/AA+/) $518.445 million of wastewater system revenue refunding bonds, 5s of 6/2026 at 2.77%, 5s of 2030 at 2.82%, 5s of 2035 at 3.36%, 5s of 2039 at 3.86% and 5s of 2045 at 4.47%, callable 6/1/2035.
BofA Securities priced for the Las Vegas Valley Water District, Nevada, (Aa1/AA+//) $395.08 million of limited tax general obligation water improvement bonds, with 5s of 6/2029 at 2.85%, 5s of 2030 at 2.90%, 5s of 2035 at 3.49%, 5s of 2040 at 4.17%, 5s of 2045 at 4.60%, 5.25s of 2050 at 4.75% and 5.25s of 2055 at 4.84%, callable 6/1/2035.
Raymond James priced for the Seminole County School District, Florida, (Aa3/AA//) $148.645 million of sales tax revenue bonds, Series 2025, insured by: Assured Guaranty Inc., with 5s of 10/2025 at 3.02%, 5s of 2030 at 3.04% and 5s of 2034 at 3.47%, noncall.
Goldman Sachs priced for the Mid-Bay Bridge Authority, Florida, (/AA//) $138.94 million of 1st senior lien revenue refunding bonds, insured by Assured Guaranty Inc., with 10/2026 at 3.20%, 5s of 2030 at 3.34%, 5s of 2035 at 3.86% and 5s of 2040 at 4.44%, callable 10/1/2035.
Goldman Sachs priced for the Swarthmore Borough Authority, Pennsylvania, (Aaa/AAA//) $129.165 million of Swarthmore College Revenue bonds, with 5s of 9/2055 at 3.86%, callable 6/15/2035.
Morgan Stanley priced for the Maryland Stadium Authority (/AA//) $121.505 million of Minor League Baseball projects sports entertainment facilities revenue bonds, with 5s of 6/2027 at 3.05%, 5s of 2030 at 3.15%, 5s of 2035 at 3.73% and 5s of 2037 at 4.00%, callable 6/15/2035.
In the competitive market, the Indian Prairie School District #204, Illinois, (Aa1/AAA//) sold $156.5 million GO school building bonds to Jefferies, with 5s of 1/2028 at 2.93%, 5s of 2030 at 3.08%, 5s of 2035 at 3.68%, 5s of 2040 at 4.27% and 5s of 2045 at 4.75%, callable 1/15/2035.
The Athens-Clarke County Unified Government, Georgia, (Aa1//AAA/) sold $134.06 million water and sewerage revenue refunding bonds to TD Securities, with 5s of 1/2026 at 2.80%, 5s of 2030 at 2.84%, 5s of 2035 at 3.36% and 5s of 2038 at 3.72%, noncall.
The Virginia Public School Authority (Aaa/AAA/AAA/) sold $104.53 million special obligation school financing bonds, to J.P. Morgan with 5s of 8/2026 at 2.84%, 5s of 2030 at 2.87%, 5s of 2035 at 3.47%, 5s of 2039 at 3.92% and 4.625s of 2045 at par, callable 8/1/2035.
The Putnam County School District, Florida, (A2//A+/) sold $100 million GO school bonds to BofA Securities, with 5s of 7/2026 at 3.02%, 5s of 2030 at 3.17%, 5s of 2035 at 3.70%, 5s of 2040 at 4.27%, 5.25s of 2045 at 4.72%, 5s of 2049 at 4.92% and 5s of 2054 at par, callable 7/1/2035.
AAA scales
MMD’s scale was unchanged: The one-year was at 2.77% and 2.75% in two years. The five-year was at 2.82%, the 10-year at 3.35% and the 30-year at 4.54% at 3 p.m.
The ICE AAA yield curve saw small cuts on yields 10 years and out: 2.78% (-1) in 2026 and 2.70% (-1) in 2027. The five-year was at 2.85% (-1), the 10-year was at 3.29% (+1) and the 30-year was at 4.54% (+1) at 4 p.m.
The S&P Global Market Intelligence municipal curve was unchanged: The one-year was at 2.78% in 2025 and 2.76% in 2026. The five-year was at 2.81%, the 10-year was at 3.34% and the 30-year yield was at 4.54% at 4 p.m.
Bloomberg BVAL saw yields cut two basis points 10 years and out: 2.74% (unch) in 2025 and 2.76% (unch) in 2026. The five-year at 2.85% (unch), the 10-year at 3.32% (+2) and the 30-year at 4.53% (+2) at 4 p.m.
Treasuries saw small losses.
The two-year UST was yielding 3.959% (+2), the three-year was at 3.927% (+3), the five-year at 4.03% (+3), the 10-year at 4.461% (+2), the 20-year at 4.993% (+2) and the 30-year at 4.985% (+2) near the close.
Primary to come
The an Francisco Public Utilities Commission (Aa2/AA-//) is set to price Thursday $994.25 million of San Francisco water revenue and refunding bonds. J.P. Morgan.
The Downtown Revitalization Public Infrastructure District, Utah, is set to price Thursday $869 million of SEG Redevelopment project sales tax revenue bonds, consisting of $651.265 million of Series 2025A (A1///) and $217.735 million of Series 2025B (A3///). Goldman Sachs.
The Metropolitan Washington Airports Authority (Aa3/AA-/AA-/) is set to price Thursday $714.495 million of airport system revenue and refunding AMT bonds, serials 2026-2045, terms 2050, 2055. RBC Capital Markets.
The Los Angeles Department of Water and Power (Aa2//AA-/AA) is set to price Thursday (retail Wednesday) $507.04 million of power system revenue bonds, serial 2030-2035. Barclays.
The Clifton Higher Education Finance Corp. (Aaa///) is set to price Wednesday $457.195 million of International Leadership of Texas, Inc. education revenue and refunding bonds, serials 2026-2055. PNC Capital Markets LLC.
The Utah Housing Corp. (Aa2///) is set to price Wednesday $350 million of single-family mortgage bonds. RBC Capital Markets.
The Illinois Finance Authority (/A+/AA-/) is set to price Thursday $297.005 million for UChicago Medicine revenue bonds. J.P. Morgan.
The Colorado Health Facilities Authority (Aa2/AA/AA/) is set to price Wednesday $282.38 million of AdventHealth Obligated Group hospital revenue bonds J.P. Morgan.
Palm Beach County, Florida, is set to price Wednesday $235.8 million of Provident Group – PBAU Properties II LLC – Palm Beach Atlantic University Project revenue bonds. J.P. Morgan.
The Jackson County School District, Georgia, (Aa1/AA+//) is set to price Thursday $200 million of general obligation school bonds, insured by the Georgia State Aid Intercept Program. Raymond James.
The Nebraska Investment Finance Authority (/AAA//) is set to price Wednesday $188.29 million of single-family revenue bonds, non-AMT social bonds and taxables. J.P. Morgan.
The San Marcos Unified School District, California, (Aa3///) is set to price $186.23 million of Series A Election 2024 GOs and 2025 GO refunding bonds. RBC Capital Markets.
Seattle (Aa1/AA+//) is set to price Wednesday $155.565 million of drainage and wastewater system improvement and refunding revenue bonds, serials 2026-2055. BofA Securities.
The Louisiana Public Facilities Authority is set to price Wednesday $154.98 million of Acadiana Renaissance Charter Academy Project revenue bonds. HJ Sims.
The Dormitory Authority of the State of New York (Aa2///) is set to price Wednesday $135.565 million of Orange-Ulster issue master Boces Program Lease revenue bonds serials 2026-2044. Roosevelt & Cross.
The Sunnyvale School District, California, (/AAA//) is set to price Wednesday $134.795 million of general obligation and refunding bonds. Stifel.
Garland, Texas, (/AA+/AA+/) is set to price Wednesday $116.59 million of general obligation bonds and combination tax and revenue certificates of obligation. J.P. Morgan.
The Ventura Unified School District, California, (Aa3///) is set to price $113 million of general obligation bonds, serials 2026-2027, 2035-2045, term 2055. RBC Capital Markets.
Georgetown, Texas, (/AA-/AA-/) is set to price Thursday $106.495 million of utility system revenue bonds, serials 2026-2045, terms 2050, 2055. HilltopSecurities Inc.
Competitive
Pennsylvania (Aa2/A+/AA/) is set to take bids on $853.155 million general obligation bonds, First Refunding Series A of 2025, at 11 a.m. Eastern Wednesday.
Pennsylvania is also taking bids on $317.41 million general obligation bonds, First Refunding Series B of 2025, at 11:30 a.m. Wednesday.
The Fayette County Board of Education, Kentucky, takes bids on $229.97 million general obligation bonds, Series 2025A (Kentucky School District Enhancement Program), at 11 a.m. Thursday.
New Mexico (Aa2/AA//) takes bids on $214.35 million capital projects general obligation bonds, Series 2025, at 10 a.m. Wednesday.
The Maryland Department of Transportation (Aa1/AAA/AA+/) takes bids on $200 million consolidated transportation bonds, Series 2025A, at 10:30 a.m. Wednesday.
Fort Worth, Texas, (Aa1//AA/) takes bids on $188.995 million water and sewer system revenue bonds, Series 2025, at 10:30 a.m. Wednesday.
Virginia takes bids on $171.815 million general obligation bonds, Series 2025A, and refunding Bonds, Series 2025B, at 10:30 a.m. Thursday.
