Munis steady, demand remains ‘solid’

Municipals were steady Tuesday as short-term Treasury yields fell and equities ended down.

The two-year muni-UST ratio Tuesday was at 69%, the five-year at 65%, the 10-year at 67% and the 30-year at 87%, according to Municipal Market Data’s 3 p.m. EDT read. ICE Data Services had the two-year at 68%, the five-year at 65%, the 10-year at 67% and the 30-year at 87% at a 4 p.m. read.

The muni market has “demonstrated more conviction with steady demand and appealing relative yields weighing on the long-end while shifting dynamics on the short-end have led to municipals selling-off,” said Tim Iltz, fixed income credit and market analyst at HJ Sims.

“As a result, we have seen the municipal yield curve flatten, resulting in declining slopes and less incentive to extend duration,” he said.

“Demand remains solid; reinvestment is up and last week saw another greater than $3 billion in total fund inflows, half via 2a7 funds,” said Matt Fabian, president of Municipal Market Analytics.

After two weeks of sizable inflows, muni money market funds have hit $142 billion, their highest asset level since Jan. 19, Fabian said.

“This seems a reasonable choice lately: not only because of the potential for tumult in USTs via repo pressures, excess front-end supply, data releases, and (the Supreme Court)’s coming opinion on tariffs,” he said.

“But also noting municipal benchmarks’ truculent lag of recent UST price weakness, intermediate and long spots remain well overbought via MMA valuation metrics as well,” Fabian said.

Average trades “skewed strongly” to retail activity sizes last week, “which will at least partially reflect the holiday schedule, but the relative lack of large block trading while yields diverge from USTs is a concern nonetheless,” he said, noting this points to the increased likelihood of a correction in the near-term.

Issuance rebounds this week, unsurprisingly, as issuers aim to take advantage of the last full trading week of November, said Chris Brigati, CIO and managing director of SWBC, and Ryan Riffe, SVP of capital markets at the firm.

On tap for the week are large hospital deals, including Ascension.

These deals “will be bellwethers: the hospital sector’s prospects were hurt by no (American Care Act) tax credit extensions,” Fabian said.

“Still, any correction is apt to be modest as strong fundamentals — low defaults, state rating improvements, growing demand via SMAs and ETFs — are unlikely to change much over the next year,” he said.

In the primary market, Morgan Stanley priced for Ascension Health Alliance (Aa3/AA/AA/) $1.755 billion of revenue bonds across three issuers. The firm priced for the Indiana Finance Authority $702.765 million of fixed-mode bonds, Series 2025A-1, with 5s of 11/2027 at 2.83%, 5s of 2030 at 2.88%, 5s of 2035 at 3.21%, 5s of 2040 at 3.81% and 5s of 2043 at 4.14%, callable 11/15/2035.

Morgan Stanley priced for the Rutherford County Health and Educational Facilities Board, Tennessee, $274.1 million of long-term mode bonds, Series 2025B-1, 5s of 11/2048 with a tender date of 11/15/2030 at 3.10%, callable 11/15/2029.

The bank also priced for the Tarrant County Cultural Education Facilities Finance Corp. $392.74 million of long-term mode bonds, Series 2025C-1, with 5s of 11/2051 with a tender date of 11/15/2032 at 3.26%, callable 11/5/2031, and $385.875 million of long-term mode bonds, Series 2025C-2, with 5s of 11/2051 with a tender date of 11/15/2035 at 3.47%, callable 11/5/2034.

Morgan Stanley priced for the Southeast Energy Authority (A1///) $600.875 million of energy supply revenue bonds, Series 2025H, with 5s of 5/2027 at 3.43%, 5s of 5/2030 at 3.55%, 5s of 11/2030 at 3.56%, 5s of 5/2035 at 4.09% and 5s of 11/2035 at 4.15%, callable 8/1/2035.

Jefferies priced for the Ohio Water Development Authority (Aaa/AAA//) $500 million of water pollution control loan fund revenue bonds, with 5s of 6/2030 at 2.50%, 5s of 12/2030 at 2.51%, 5s of 6/2035 at 2.82% and 5s of 12/2035 at 2.90%, callable 9/1/2035.

Wells Fargo priced for the Central Texas Regional Mobility Authority (A2/A+//) $203.61 million of senior lien revenue refunding bonds. The first tranche, $105.805 million of Series 2025A, saw 5s of 1/2027 at 2.73%, 5s of 2030 at 2.74%, 5s of 2035 at 2.97%, 5s of 2040 at 3.67% and 5s of 2042 at 3.93%, callable 1/1/2036.

The second tranche, $97.805 million of Series 2025B, saw 5s of 1/2027 at 2.82%, 5s of 2030 at 2.82%, 5s of 2035 at 3.09%, 5s of 2040 at 3.73% and 5s of 2042 at 3.99%, callable 1/1/2036.

BofA Securities priced for the Phoenix Civic Improvement Corp. (/AAA/AA+/) $179.2 million of transportation excise tax revenue bonds, with 5s of 7/2026 at 2.59%, 5s of 2030 at 2.53%, 5s of 2035 at 2.86% and 5s of 2037 at 3.09%, callable 7/1/2035.

Piper Sandler priced for the Colorado (Aa2/AA-//) $113.54 million of tax-exempt building excellent schools today certificates of participation, Series 2025T, with 5s of 3/2026 at 2.73%, 5s of 2030 at 2.60%, 5s of 2035 at 2.91%, 5s of 2040 at 3.55%, 5s of 2045 at 4.12% and 5s of 2046 at 4.19%, callable 3/15/2035.

Loop Capital Markets priced for the Chicago Park District (/AA-/AA/AA/) $111.945 million of GO limited tax bonds. The first tranche, $55 million of park bonds, Series 2025A, saw 5s of 1/2037 at 3.45%, 5s of 2040 at 3.83%, 5s of 2045 at 4.43% and 5s of 2049 at 4.60%, callable 1/1/2035.

The second tranche, $56.945 million of refunding bonds, Series 2025B, saw 5s of 1/2027 at 2.83%, 5s of 2030 at 2.80%, 5s of 2035 at 3.13% and 5s of 2039 at 3.72%, callable 1/1/2035.

In the competitive market, the Missouri Highways and Transportation Commission (Aa1/AA+/AA+/) sold $481.78 million of state appropriations mega projects state road bonds to Wells Fargo, with 5s of 5/2027 at 2.53%, 5s of 2030 at 2.50%, and 5s of 2031 at 2.53%, noncall.

The Columbia County School District, Georgia, (Aa1/AA+//) sold $180 million of GOs to BofA Securities, with 5s of 10/2027 at 2.50%, 5s of 2030 at 2.50%, 5s of 2037 at 3.05%, 5s of 2040 at 3.40% and 4.125s of 2045 at par, callable 10/1/2035.

Illinois (/A/A+/AA+/) sold $150 million of Build Illinois bonds (sales tax revenue bonds), Junior Obligation Series B of December 2025, to RBC Capital Markets with 5s of 6/2036 at 3.30% and 5s of 2040 at 3.83%, callable 6/15/2035.

Pricing data for Illinois’ $300 million of Build Illinois bonds (sales tax revenue bonds), Junior Obligation Series A of December 2025, and $150 million of Build Illinois bonds (sales tax revenue bonds), Junior Obligation Series C of December 2025, were unavailable as of 3:30 p.m.

CUSIP requests fall
In October, the aggregate total of identifier requests for new municipal securities — including municipal bonds, long-term and short-term notes, and commercial paper — fell 20.6% versus August totals.

On a year-over-year basis, overall municipal volumes were up 17.3% through the end of September.

Texas led state-level municipal request volume with a total of 165 new CUSIP requests in September, followed by New York (114) and California (68).

For the specific category of municipal bonds, there was a drop of 18.2% month-over-month, but these requests are still up 17.6% year-over-year.

AAA scales
MMD’s scale was unchanged: 2.52% in 2026 and 2.46% in 2027. The five-year was 2.41%, the 10-year was 2.75% and the 30-year was 4.14% at 3 p.m.

The ICE AAA yield curve was little changed: 2.54% (+1) in 2026 and 2.46% (unch) in 2027. The five-year was at 2.41% (+1), the 10-year was at 2.76% (unch) and the 30-year was at 4.11% (unch) at 4 p.m.

The S&P Global Market Intelligence municipal curve was unchanged: The one-year was at 2.52% in 2025 and 2.46% in 2026. The five-year was at 2.41%, the 10-year was at 2.75% and the 30-year yield was at 4.12% at 3 p.m.

Bloomberg BVAL was unchanged: 2.51% in 2025 and 2.46% in 2026. The five-year at 2.37%, the 10-year at 2.70% and the 30-year at 4.04% at 4 p.m.

Treasuries were firmer 10 years and in.

The two-year UST was yielding 3.578% (-3), the three-year was at 3.576% (-4), the five-year at 3.693% (-4), the 10-year at 4.122% (-2), the 20-year at 4.711% (flat) and the 30-year at 4.744% (+1) near the close.

Primary to come
The New York City Municipal Water Finance Authority (Aa1/AA+/AA+/) is set to price $1.032 billion of water and sewer system second general resolution refunding revenue bonds, Fiscal 2026 Series AA, consisting of $600 million of Series AA-1 and $431.57 million of Series AA-2. Barclays.

The Sales Tax Securitization Corp. is set to price Wednesday $454.42 million of sales tax securitization bonds, consisting of $172.37 million of Series 2025A refunding bonds (/A+/AAA/AAA/), $206.485 of Series 2025A second lien refunding bonds (/A+/AA-/AA+/) and $57.11 million of Series 2025B taxable refunding bonds (/A+/AAA/AAA/). Goldman Sachs.

The Los Angeles Community College District (Aaa/AA+//) is set to price Thursday $300 million of 2016 Election GO refunding bonds, Series F. BofA Securities.

The Medical University Hospital Authority (Aa2/AA+//) is set to price Thursday $260.395 million of FHA-insured hospital mortgage revenue bonds (Indian Land Project). BofA Securities.

Hamilton County, Ohio, is set to price Thursday $207 million of sales tax bond anticipation notes. Subordinate Series 2025 (Paycor Stadium Improvement Project). Stifel, Nicolaus & Co.

The Massachusetts Development Finance Agency (//BBB-/) is set to price Thursday $181.57 million of Tufts Medicine issue revenue bonds, consisting of $30.05 million of Series F bonds and $151.52 million of Series G taxable bonds. BofA Securities.

The University of Pittsburgh Commonwealth System of Higher Education (Aa1/AA+//) is set to price $175.375 million of Pitt asset notes. Barclays.

The Grand Rapids Economic Development Corp. is set to price Thursday $174.83 million of limited obligation revenue bonds (Beacon Hill at Eastgate Project), consisting of $107.83 million of Series A, $12.25 million of Series B-1, $15.75 million of Series B-2 and $39 million of Series B-3. Ziegler.

Montgomery County, Texas, (Aaa/AA+//) is set to price Wednesday $154.585 million of limited tax refunding bonds, Series 2025A. RBC Capital Markets.

The Genesee County Funding Corp. (/BBB+//) is set to price Wednesday $150 million of revenue bonds (Rochester Regional Health Energy Projects), consisting of $142.195 million of Series 2025A bonds and $7.805 million Series 2025B taxable bonds. BofA Securities.

The Helena High School District, Montana, (A1/AA//) is set to price Thursday $130 million of GO school building bonds. D.A. Davidson.

The Public Finance Authority is set to price Thursday $116.915 million of tax-exempt student housing revenue bonds (PRG — Oxford Properties LLC), Series 2025A. Raymond James.

The Golden State Connect Authority is set to price Thursday $106 million of telecommunications revenue bonds (Broadband Project). KeyBanc Capital Markets.

Competitive
Fulton County, Georgia, (Aa2/AA/AA/) is set to sell $195.675 million of water and sewerage revenue refunding bonds at 10 a.m. Wednesday.

The Davis School District Board of Education, Utah, (Aaa///) is set to sell $100 million of GOs, Series 2025B, at 11:30 a.m. Thursday.