Munis cheapen as USTs show slight rebound

Munis were cheaper in spots on Tuesday as U.S. Treasury yields fell slightly. Equities ended lower.

Muni yields rose by up to four basis points depending on the scale. UST yields richened by one to four basis points.

The Treasury market was a bit volatile throughout the day, thanks to the selloff in equities, according to Ajay Thomas, head of public finance at FHN Financial. In munis, there wasn't any one factor or theme driving the market's performance, Thomas said.

"We saw deals get supported, but just supported," Thomas said, adding, the secondary market felt softer, with limited liquidity. Investors could be "more selective and choosy" thanks to "lots of deals in the market pricing, lots to pick from."

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New-issue market
In the primary market Tuesday, Goldman Sachs (GS) priced for the Ohio Water Development Authority (Aaa/AAA//) $400 million of state revolving fund revenue bonds, Series 2026A, with 5s of 12/2034 at 2.96%, 5s of 6/2036 at 3.10%, 5s of 12/2036 at 3.15%, 5s of 12/2041 at 3.55% and 5s of 12/2046 at 3.98%, callable 6/2036.

BofA priced for the North Carolina Municipal Power Agency (/A/A+/) $289.495 million of Number 1 Catawba electric revenue refunding bonds, with 5s of 1/2027 at 2.55%, 5s of 2031 at 2.88% and 5s of 2032 at 2.93%, noncall.

Wells Fargo (WFC) priced for the Pennsylvania Higher Education Facilities Authority (Aa1/AA+//) $270.03 million of Trustees of the University of Pennsylvania refunding revenue bonds, Series 2026A, with 5s of 8/2027 at 2.44%, 5s of 2031 at 2.78%, 5s of 2036 at 3.12% and 5s of 2038 at 3.31%, noncall.

In the competitive market, the Santa Clara Unified School District, California, (Aaa/AAA//) sold to Wells Fargo (WFC) $439.53 million of refunding general obligation bonds, with 5s of 8/2027 at 2.08%, 5s of 2031 at 2.38%, 5s of 2036 at 2.78% and 4s of 2041 at 3.55%, callable 8/2035.

The Florida State Board of Education (Aaa/AAA/AAA/) sold to BofA Securities $285 million of public education capital outlay refunding bonds, Series 2026A, with 5s of 6/2027 at 2.43%, 5s of 2031 at 2.77% and 5s of 2034 at 2.93%, noncall.