Munis little changed; two prepay deals price

Munis were little changed Monday in the secondary as two large prepaid gas deals priced in the primary market. U.S. Treasuries were slightly cheaper and equities ended up.

Muni yields were cut up to a basis point, depending on the scale, while UST yields rose one to four basis points.

Issuance continues to drive performance in the muni market. Despite Friday's run-up in USTs, muni yields adjusted "less dramatically," said Ajay Thomas, head of public finance at FHN Financial.

This week's estimated $13 billion in supply is mostly in tax-exempt offerings and should receive support from investors who are still holding a lot of cash, he said.

"The uncertainties present in the economy right now make for a very cautious investor base, but selectively, investors are still wanting and needing municipal bonds," Thomas said. "So long as tensions do not boil over in the Middle East and we continue to make progress towards ending the conflict, the market should relatively perform well."

New-issue market
In the primary market Monday, BofA Securities priced for the Black Belt Energy Gas District (A1///) $1.147 billion of gas project revenue bonds, 2026 Series C, with 5s of 6/2028 at 3.36%, 5s of 6/2031 at 3.78%, 5s of 12/2031 at 3.83% and 5.25s of 6/2036 at 4.30%.

Jefferies priced for the Public Energy Authority of Kentucky (Baa1///) $525 million of gas supply revenue bonds, 2026 Series A, with 5s of 6/2034 at 4.50%, callable 3/1/2034.

CUSIP requests rise
In April, the aggregate total of identifier requests for new municipal securities ? including municipal bonds, long-term and short-term notes, and commercial paper ? rose 17.2% versus March totals.

On a year-over-year basis, overall municipal volumes were down 0.2% through the end of April.

Texas led state-level municipal request volume with a total of 137 new CUSIP requests in April, followed by California (132) and New York (89).

For the specific category of municipal bonds, there was an increase of 18.5% month-over-month, yet requests are still down 4.2% year-over-year.