Munis steady to slightly cheaper amid strong supply

Muni yields ticked up in spots on Wednesday, as U.S. Treasuries weakened and equities ended mixed.

Tim Iltz, fixed-income credit and market analyst at HJ Sims, attributed Wednesday's yield movement to high supply and geopolitical developments.

"Some of it is related to the headlines that we're seeing right now, particularly when we think about yields and what we've seen over the last couple of days," Iltz said. "We're seeing quite a bit of inquiry on the short end of the yield curve, as accounts are going longer. But a lot of what we're seeing, as it relates to munis, is related to the new issue calendar, also. We're seeing a fairly heavy calendar this week."

New-issue calendar
In the primary market, Wells Fargo (WFC) priced for the Maryland Department of Housing and Community Development (Aa1//AA+/) $275 million of social residential revenue bonds. The first tranche, $150 million of taxable 2026 Series C bonds, saw all bonds price at par ? 3.92s of 3/2027, 4.097s of 3/2030, 4.147s of 9/2030, 4.933s of 3/2036, 4.983s of 9/2036, 5.433s of 9/2041 and 5.613s of 3/2043 ? except for 6.25s of 9/2056 at 4.797%, callable 3/1/2034.

The second tranche, $125 million of non-AMT 2026 Series B bonds, saw all bonds price at par ? 2.95s of 9/2030, 4s of 2038, 4.7s of 2046 and 4.8s of 2.052 ? except for 6.25s of 2056 at 3.48%, callable 3/1/2034.

In the competitive market, the Florida Board of Governors (Aa3/A/A+/) sold to Wells Fargo (WFC) $229.13 million of Florida International University dormitory revenue bonds, Series 2026A, with 5s of 7/2029 at 2.69% (non-insured), 5s of 2031 at 2.87% (non-insured), 5s of 2036 at 3.31% (non-insured), 5s of 2041 at 3.74% (BAM insured), 4.25s of 2046 at 4.439% (BAM insured), 4.5s of 2051 at 4.67% (BAM insured), and 4.5s of 2056 at 4.686% (BAM insured), callable 7/1/2036.

Fund flows
The Investment Company Institute Wednesday reported outflows of $349 million for the week ending April 8, following $727 million of outflows the previous week. This differs from LSEG, which reported $866 million of inflows in the week.

Exchange-traded funds saw inflows of $1.484 billion after $1.36 billion of inflows the week prior, per ICI data.