Iran optimism and strong yields boost heavy muni issuance
Munis were richer on Tuesday, as U.S. Treasuries saw gains and equities ended higher.
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Muni yields were bumped by up to five basis points, depending on the scale, with the biggest gains at the front end. UST yields were four to six basis points firmer.
The muni and UST markets are taking cues from the geopolitical headlines, said Pat Luby, head of municipal strategy at CreditSights, as the U.S. reportedly held
“It seems like investors want to put money to work,” Luby said. “Yields are still a lot higher than where they were at the end of June, and so I think that’s attracted a lot of interest. And having a really robust new issue calendar is very appealing for [separately managed account] managers and institutional managers.”
New-issue market
In the primary market Tuesday, BofA Securities priced for Austin, Texas, $650.44 million of convention center project special tax revenue bonds. The first series, $529.115 million of senior lien bonds (Aa2/AA-//AA-/), Series 2026A, saw 5s of 11/2029 at 2.96%, 5s of 2031 at 3.18%, 5s of 2036 at 3.70%, 5s of 2041 at 4.14%, 5s of 2046 at 4.50%, 5.25s of 2051 at 4.74%, 5.25s of 2056 at 4.84% and 5.5s of 2061 at 4.87%, callable 11/2036.
The second tranche, $121.29 million of junior lien bonds (Aa3/BBB+//A+/), Series 2026B, saw 5s of 11/2029 at 3.17%, 5s of 2031 at 3.38%, 5s of 2036 at 3.94%, 5s of 11/2041 at 4.28%, 5s of 2046 at 4.68%, 5.25s of 2051 at 4.86% and 5.5s of 2056 at 4.88%, with maturities from 2041 through 2043 and 2056 insured by Assured Guaranty, callable 11/2036.
J.P. Morgan priced for San Antonio, Texas, (Aa2/AA-/AA-/) $517.42 million of electric and gas systems revenue refunding bonds, New Series 2026B, with 5s of 2/2027 at 2.66%, 5s of 2031 at 3.11%, 5s of 2036 at 3.60%, 5s of 2041 at 4.04%, 5s of 2046 at 4.35% and 5s of 2062 at 5.02%, callable 2/2037.
J.P. Morgan priced for San Antonio (Aa3/A+/AA-/) $513.02 million of variable rate junior lien revenue and refunding bonds, Series 2026B, with all bonds priced at par: 3.25s of 2/2056, 3.5s of 2056 and 3.65s of 2056.
In the competitive market, the Los Angeles Department of Water and Power (Aa3//AA-/AA/) sold $400 million of water system revenue bonds in three series. The first series, $125 million of Bid Group 1, sold to J.P. Morgan, with 6s of 7/2031 at 3.09% and 5s of 2035 at 3.50%, noncall.
The second series, $125 million of Bid Group 2, sold to Goldman Sachs, with 5s of 7/2048 at 4.54%, 5s of 2052 at 4.70% and 5s of 2056 at 4.84%, callable 1/2036.
The third series, $150 million of Bid Group 3, sold to J.P. Morgan, with 5s of 7/2041 at 4.03% and 5s of 2046 at 4.41%, callable 1/2036.
