Munis see weakness on short-end, outperform USTs

Munis cheapened on the short end Tuesday, as U.S. Treasuries weakened and equities ended down.

It's difficult to tell whether the markets were more affected by spiking oil prices, eroding peace talks between the United States and Iran or Kevin Warsh's hawkish comments during his confirmation hearing to chair the Federal Reserve, said James Pruskowski, managing director at Hennion & Walsh.

In municipals, "primary market supply remains high, and spreads are getting a bit spicy," Pruskowski said. "I think that's creating a bit of angst in the market, but I'd say deals are clearing at tight spreads. But supply is coming and the market's receiving it, so the tone remains quite positive."

New-issue market
In the primary market Tuesdday, Jefferies priced for the New Jersey Health Care Facilities Financing Authority (A1/AA-//), on behalf of RWJ Barnabas Health Obligated Group $1.122 billion of revenue and refunding bonds, Series 2026A, with 5s of 7/2027 at 2.48%, 5s of 2031 at 2.87%, 5s of 2036 at 3.21%, 5.5s of 2041 at 3.51%, and 5.5s of 2043 at 3.63%, callable 7/2036.

BofA Securities priced for the Nebraska Public Power District (A1/A/A+/) $830.95 million of revenue bonds. The first tranche, $473.21 million of Series 2026A, saw 5s of 1/2027 at 2.48%, 5s of 1/2031 at 2.75%, 5s of 7/2031 at 2.80%, 5s of 1/2036 at 3.14%, 5s of 1/2041 at 3.63%, 5s of 1/2046 at 4.14%, 5s of 1/2051 at 4.47% and 5.25s of 1/2055 at 4.55%, callable 1/2036.

The second tranche, $351.975 million of Series 2026B, saw 5s of 1/2027 at 2.48%, 5s of 2031 at 2.75%, 5s of 2036 at 3.14%, 5s of 2041 at 3.63%, 5s of 2046 at 4.14%, 5s of 2051 at 4.47% and 5.25s of 2055 at 4.55%, callable 1/2036.

The third tranche, $5.765 million of Series 2026C, saw all bonds price at par: 4.23s of 1/2031 and 4.36s of 2032.

Goldman Sachs (GS) priced for the Black Belt Energy District (Aa2///) $830.165 million of gas project revenue bonds, Series 2026I, with 5s of 10/2033 at 3.92%, callable 7/2033.

In the competitive market, the Virginia College Building Authority (Aa1/AA+/AA+/) sold to BofA Securities $177.835 million of educational facilities revenue refunding bonds, Series 2026A, with 5s of 2/2027 at 2.40%, 5s of 2031 at 2.60% and 5s of 2033 at 2.75%, noncall.

The authority also sold to BofA Securities $226.315 million of educational facilities revenue refunding bonds, Series 2026B, with 5s of 2/2027 at 2.40%, 5s of 2031 at 2.60% and 5s of 2035 at 2.92%, noncall.