Munis, USTs richen despite uncertain geopolitics

Munis grew richer on Tuesday, despite the appearance of deteriorating peace talks with Iran. U.S. Treasuries saw small gains, and equities ended mixed.

Muni yields fell two to five basis points, depending on the scale. UST rates fell one to three basis points, with larger gains out long.

The status of the war with Iran is confusing, said James Pruskowski, managing director at Hennion & Walsh. The Trump administration keeps promising that a peace deal is in progress, but this is the third straight week it's made that claim. Markets seem to be taking the administration at its word, which has promoted stability, he said.

Outside of geopolitical uncertainty, "June is delivering exactly what the playbook called for so far," Pruskowski said. "Heavy supply, large reinvestment demand and surging inflows arriving simultaneously. I'd say new-issue concessions are widening, but deals remain well oversubscribed."

High absolute rates are creating their own demand, Pruskowski added.

New-issue market
In the primary market Tuesday, Jefferies priced for the Regents of the University of California (Aa2/AA/AA/) $1.178 billion of general revenue bonds. The first tranche, $694.64 million of Series 2026CH bonds, saw 5s of 5/2031 at 2.59%, 5s of 2036 at 2.98%, 5.25s of 2039 at 3.35%, and 5.5s of 2043 at 3.55%, callable 5/2036, except the 2037, 2038 and 2039 maturities, which are noncall.

The second tranche, $333.49 million of Series 2026CG bonds, saw 5s of 5/2033 at 2.82%, 5.25s of 2037 at 3.12% and 5.25s of 2040 at 3.41%, noncall.

The third tranche, $150 million of taxable Series 2026CI bonds, saw 4.504s of 5/2031 priced at par, subject to a make whole call.

Barclays (BCS) priced for the Parish of St. John the Baptist, Louisiana, (A2/A-/A/) $600 million of Marathon Oil Corp. Project bonds, Sub-series 2017D, with 3s of 6/2037 with a tender date of 7/2029 priced at par, noncall.

J.P. Morgan priced for the Harris County Cultural Education Facilities Finance Corp. (Aa3/AA-//) $436.59 million of Memorial Hermann Health System hospital revenue bonds, Series 2026A, with 5s of 7/2028 at 2.69%, 5s of 2031 at 3.05%, 5s of 2036 at 3.43%, 5s of 2040 at 3.75% and 5s of 2046 at 4.31%, callable 7/2036, except for the 2031, 2034 and 2036 bonds.

Wells Fargo (WFC) priced for the New York Convention Center Development Corp. (A1///) $428.97 million of senior lien revenue refunding bonds. The first tranche, $375.52 million of Series 2026A bonds, saw 5s of 11/2027 at 2.55%, 5s of 2031 at 2.93%, 5s of 2036 at 3.31%, 5s of 2041 at 3.75% and 5s of 2045 at 4.00%, callable 11/2036.

The second tranche, $53.46 million of forward delivery Series 2026B bonds, saw 5s of 11/2027 at 2.78%, 5s of 2031 at 3.13%, 5s of 2036 at 3.59%, 5s of 2041 at 3.95% and 5s of 2046 at 4.31%, callable 11/2036.