Munis Enter Heavy Week Expecting $17B in Supply

Relevant Item:
Spreadsheet (Muni Primary Issuance Tracker, Forward Calendar)

The municipal bond market enters a heavier primary calendar this week with about $17 billion expected to price, on firmer footing after another week of positive performance, supported by continued fund inflows and reinvestment demand.

Two- and 10-year AAA municipal yields declined 2 bps last week, while the 30-year yield was unchanged, according to AllianceBernstein’s Week in Muniland report published today. The Bloomberg Municipal Bond Index returned 0.12% for the week, lifting its year-to-date return to 1.23%. Still, new issues for last week were relatively quieter compared with the week before, with all eyes on the Treasury market given the ongoing geopolitical developments and weak jobs numbers, according to Dora Lee, director of research at Belle Haven Investments.

Municipal funds took in $759 million during the week, extending the inflow streak to 17 consecutive weeks, even with last week’s pace moderating from the prior week. Year-to-date inflows reached $64.7 billion, the second-highest pace on record behind 2021, according to the report.

The July core consumer price index rose 0.2% month over month and 2.5% from a year earlier, while headline inflation increased 0.1% monthly and 3.4% over the last 12 months. AllianceBernstein said the data did not materially shift the outlook for the monetary policy and continues to expect the Federal Reserve to remain on hold for the rest of the year.

BofA Securities is expected to price $120 million of Mission Economic Development Corp. solid waste disposal revenue bonds for the Graphic Packaging International LLC project as early as today. The bonds are rated BB- by S&P Global Ratings and Ba2 by Moody’s. Proceeds will finance or reimburse costs associated with the acquisition, construction, installation, improvement and equipping of solid-waste disposal facilities at Graphic Packaging’s paperboard manufacturing facility in Waco, Texas.

Tomorrow, Tuesday, Aug. 18, Jefferies, Goldman Sachs, BofA Securities and Siebert Williams Shank are expected to price the city of Los Angeles’ Department of Airports’ $2.7 billion in revenue bonds for LAX to fund capital projects and refinance outstanding debt.

On Wednesday, Aug. 19, BofA Securities is expected to price the Los Angeles County Metropolitan Transportation Authority’s $530.6 million of toll revenue first lien bonds, Series 2026A, to finance the $1.5 billion I-105 ExpressLanes project.

In the past week, Baird priced Utah Charter School Finance Authority’s $59.2 million Series 2026A revenue bonds for the Utah Charter Academies. Yields range from 3.15% to 5%, with serial maturities from 2029 to 2061. The bonds carry an AA enhanced rating under Utah’s charter school credit enhancement program and a BB+ underlying rating from S&P.

Baird also priced the Arkansas Development Finance Authority’s $43 million revenue bond deal on behalf of borrower entity AMS Properties – Arkansas LLC to finance Academies of Math & Science’s charter school facilities in Arkansas. Final yields tightened by 14 bps for the tax-exempt portion and 25 bps for the taxable portion versus price talk.

Octus compiles a list of potential borrowers coming to market using EMMA disclosures and MuniOS deal alerts. New additions in the last week include:

• Graphic Packaging International LLC;
• Energy Southeast, a Cooperative District;
• Mary Free Bed Rehabilitation Hospital;
• Plenary Walsh Keystone Partners LLC; and
• Regents of the University of Michigan.

A repository of the current and historical forward calendars, municipal primary issuance trackers and Build America Bonds trackers can be found HERE.