Municipals were slightly firmer Thursday as the Triborough Bridge and Tunnel Authority deal was upsized to $1.6 billion and outflows returned to muni mutual funds. U.S. Treasury yields fell and equities ended down.
The two-year municipal to UST ratio Thursday was at 67%, the five-year at 67%, the 10-year at 69% and the 30-year at 84%, according to Municipal Market Data’s 3 p.m. EST read. ICE Data Services had the two-year at 67%, the five-year at 65%, the 10-year at 68% and the 30-year at 82% at 4 p.m.
Munis “responded in part to a
In a constructive development, two-way flows seem “active along the entire curve as buyers take notice of higher yield ranges among many quality credits,” she said.
While munis were firmer Wednesday and Thursday, yields are at their highest levels in over a year, Olsan noted.
Following “bond-friendly” producer and consumer price index data, all maturities recorded strong customer buying but the one- to three-year and seven-year and longer ranges “notched 65% or higher dealer-to-customer sells — where typical volume falls around 60% in these ranges,” she said.
“In short call/short maturities, the concessions to the option represent meaningful yield pickups,” Olsan said.
A dealer purchase of Ohio State GO 5s due 2030 with a 2026 call at 3.20% was “spread about 25 basis points to the same name of a noncallable 2026 maturity,” she said.
At the longer end of the curve, “the short-call trade offers ample spread and yield along with moderate durations: a sale of A1/A American Municipal Power, Ohio, 5s due 2046 (call 2026) at 4.45% corresponded to a duration of 4.54 years — or more than 100 basis points above comparable five-year area credits,” Olsan said.
With heightened volatility, she said, “selling pressure will be watched for what it may mean to rate direction.”
In the last week, bids wanteds have been elevated, but not to a level that would cause major concern, she said.
“Some items are related to Los Angeles credits, but many results show bonds trading into orders — supportive to what may be a volatile period for several issues,” Olsan said.
Select Los Angeles Department of Water and Power bonds widened around 10 basis points outside 10 years following an ratings downgrade
In the primary market Thursday, Siebert Williams Shank priced and repriced for institutions the Triborough Bridge and Tunnel Authority’s (A1/A+//AA/) upsized
Wells Fargo priced for the Regents of the University of Colorado (Aa1//AA+/) $293.355 million of university enterprise revenue bonds. The first tranche, $177.35 million of Series 2025A bonds, saw 5s of 6/2026 at 2.92%, 5s of 2030 at 3.06%, 5s of 2035 at 3.35%, 5s of 2040 at 3.69%, 4.125s of 2045 at 4.31%, 5s of 2050 at 4.19% and 4.25s of 2055 at 4.43%, callable 6/1/2035.
The second tranche, Series 2025B refunding bonds, saw 5s of 6/2026 at 2.92%, 5s of 2030 at 3.06%, 5s of 2035 at 3.35%, 5s of 2040 at 3.69%, 4.125s of 2045 at 4.31% and 4.25s of 2047 at 4.41%, callable 6/1/2035.
J.P. Morgan priced for the Connecticut Health and Educational Facilities Authority (Aaa/AAA//) $219.7 million of Yale University revenue bonds, Series U, with 5s of 7/2033 at 3.13%, noncall.
Fund flows
Investors pulled $251.2 million from municipal bond mutual funds in the week ending Wednesday, following $841.6 million of outflows the prior week, according to LSEG Lipper data.
High-yield funds saw inflows of $243.7 million compared to the previous week’s inflows of $527.1 million.
Tax-exempt municipal money market funds saw outflows of $1.56 billion for the week ending Jan. 13, bringing total assets to $137.78 billion, according to the Money Fund Report, a weekly publication of EPFR.
The average seven-day simple yield for all tax-free and municipal money-market funds fell to 1.63%.
Taxable money-fund assets saw $72.7 billion pulled.
The average seven-day simple yield was at 4.06%.
The SIFMA Swap Index rose to 2.54% Wednesday compared to the previous week’s 1.83%.
AAA scales
MMD’s scale was bumped up to three basis points: The one-year was at 2.83% (-1) and 2.85% (-2) in two years. The five-year was at 2.95% (-1), the 10-year at 3.18% (-2) and the 30-year at 4.07% (unch) at 3 p.m.
The ICE AAA yield curve was bumped two to three basis points: 2.82% (-2) in 2026 and 2.86% (-2) in 2027. The five-year was at 2.91% (-2), the 10-year was at 3.15% (-2) and the 30-year was at 3.98% (-2) at 4 p.m.
The S&P Global Market Intelligence municipal curve was bumped one to two basis points: The one-year was at 2.82% (-2) in 2025 and 2.85% (-1) in 2026. The five-year was at 2.91% (-1), the 10-year was at 3.12% (-1) and the 30-year yield was at 3.99% (unch) at 4 p.m.
Bloomberg BVAL was bumped one to two basis points: 2.77% (-1) in 2025 and 2.84% (-2) in 2026. The five-year at 2.96% (-2), the 10-year at 3.21% (-2) and the 30-year at 4.02% (-2) at 4 p.m.
Treasuries rallied.
The two-year UST was yielding 4.237% (-3), the three-year was at 4.299% (-4), the five-year at 4.395% (-5), the 10-year at 4.605% (-5), the 20-year at 4.916% (-4) and the 30-year at 4.845% (-4) at the close.