Munis weaker, USTs pare losses at the close

Munis were weaker Thursday, as U.S. Treasury yields fell out long and equities ended down.

With front-end rates off so much Thursday morning, "liquidity providers backed off noticeably in the morning in terms of bid with offers slow to follow," said Matt Smith, founder and CEO of Spline Data, noting it was likely a response to elevated bids wanted counts, along with rates.

As the selloff started to reverse, bid dispersion began returning pretty quickly and firmed relative to the early morning, he said.

Munis followed the flattener in rates Thursday. The asset class often doesn't track the Treasury curve on a day-to-day basis, but that intraday relationship can resurface when ratios are tight, Smith said.

New-issue market
In the primary market Thursday, Ramirez priced for the New York State Housing Finance Agency (Aa2///) $235.145 million of sustainability affordable housing revenue bonds. The first tranche, $61.545 million of 2026 Series B-1, saw all bonds price at par: 2.6s of 5/2029, 2.95s of 5/2031, 2.95s of 11/2031, 3.5s of 5/2036, 3.55s of 11/2036, 4.15s of 11/2041, 4.65s of 11/2046, 4.8s of 11/2051 and 4.875s of 11/2057, callable 5/1/2031.

The second tranche, $173.6 million of 2026 Series B-2, saw 3s of 11/2055 with a tender date of 5/1/2030 price at par, callable 5/1/2028.

In the competitive market, the Aiken County Consolidated School District, South Carolina, (Aa1/AA//) sold $200 million of GOs, Series 2026A, to Truist with 5s of 4/2027 at 2.50%, 5s of 2031 at 2.51% and 5s of 2036 at 3.04%, noncall.

Fund flows
Investors added $1.805 billion to municipal bond mutual funds in the week ended Wednesday, following $613.6 million of inflows the prior week, according to LSEG Lipper data.

High-yield funds saw outflows of $650.7 million compared to inflows of $17.2 million the previous week.

Tax-exempt municipal money market funds saw inflows of $756.5 illion for the week ending March 16, bringing total assets to $142.379 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 was 1.97%.

Taxable money-fund assets saw $949.6 million added, bringing the total to $7.675 trillion.

The average seven-day simple yield was 3.35%.

The SIFMA Swap Index was at 2.41% on Wednesday compared to the previous week's 2.43%.