Municipals were little changed Monday as U.S. Treasury yields fell and equities ended mixed.
The two-year ratio Monday was at 81%, the five-year at 82%, the 10-year at 82% and the 30-year at 95%, according to Municipal Market Data's 3 p.m. EDT read. ICE Data Services had the two-year at 78%, the five-year at 78%, the 10-year at 79% and the 30-year at 94% at 4 p.m.
The muni market moved up then down last week, but on balance, was fairly flat, said Daryl Clements, a portfolio manager at AllianceBernstein.
The asset class posted gains of 0.07% last week, bringing year-to-date returns to negative 1.62%, he said.
"The market has seen seven consecutive weeks of municipal mutual fund/exchange-traded fund outflows, although this is not surprising given that retail investors tend to follow performance," he said.
On a positive note, outflows have been more "manageable" over the past two weeks, and the muni market was able to take down a "sizable" new-issue calendar last week, Clements said.
Issuance this week is estimated at $10.4 billion, led by the District of Columbia with a $1.5 billion deal, the East Bay Municipal Utility District, California, with a $1.1 billion deal and the Los Angeles Department of Water and Power with a nearly $1 billion deal.
Elsewhere, the April month-to-date price return for the ICE Municipal Bond Index is negative 1.53%, a "slight improvement" over March when it returned negative 2.11%, said Pat Luby, head of municipal strategy at CreditSights.
Over the past 15 years, the price return for the index in May has averaged 0.45%, the second-best month of the year following November (0.51%), he said.
From 2020 to 2024, May was third (0.51%), behind July (0.89%) and November (2.73%), Luby said.
"If Treasury market volatility persists into May and June, the technical support from muni reinvestment demand may not be enough to protect against negative returns, but should help to tighten the performance gap relative to Treasuries," he said.
Muni investors will receive $68 billion of principal and interest payments over the next 35 days, more than the combined total of March and April, which was $55 billion, Luby said.
Issuers will return $26 billion and $19 billion of principal in May and June 1, respectively; they will also pay out $12 billion of interest in May and $10 billion on June 1, he said.
The $26 billion of principal is set to be paid out in May, a 73% increase from what was returned in April and 21% more than what was paid in May 2024, according to Luby.
States with the largest total redemptions in May are California with $5.8 billion New York with $2.9 billion and Michigan with $2.6 billion.
AAA scales
MMD's scale was unchanged: The one-year was at 2.97% and 3.00% in two years. The five-year was at 3.12%, the 10-year at 3.44% and the 30-year at 4.46% at 3 p.m.
The ICE AAA yield curve was bumped one to three basis points: 2.98% (-3) in 2026 and 2.98% (-3) in 2027. The five-year was at 3.04% (-3), the 10-year was at 3.37% (-3) and the 30-year was at 4.43% (-1) at 4 p.m.
The S&P Global Market Intelligence municipal curve was little changed: The one-year was at 2.96% (unch) in 2025 and 2.99% (unch) in 2026. The five-year was at 3.12% (unch), the 10-year was at 3.44% (unch) and the 30-year yield was at 4.46% (-1) at 4 p.m.
Bloomberg BVAL was little changed: 2.91% (+3) in 2025 and 2.97% (+2) in 2026. The five-year at 3.11% (unch), the 10-year at 3.42% (unch) and the 30-year at 4.46% (unch) at 4 p.m.
Treasuries saw gains throughout the curve.
The two-year UST was yielding 3.683% (-7), the three-year was at 3.672% (-7), the five-year at 3.812% (-5), the 10-year at 4.211% (-3), the 20-year at 4.71% (-1) and the 30-year at 4.689% (-1) near the close.
Primary to come
The District of Columbia (Aa1/AAA//) is set to price Thursday $1.491 billion of income tax secured revenue bonds, consisting of $1.19 billion of tax-exempt refunding bonds, Series 2025A, serials 2026-2045, term 2050, and $301.08 million of taxables, Series 2025B, serials 2026-2040, terms 2045, 2050. Wells Fargo.
The East Bay Municipal Utility District, California, (Aaa/AAA//) is set to price Thursday $1.095 billion of water system revenue bonds, consisting of $256.505 million of green Series 2025A bonds, serials 2040-2045, terms 2049, 2055; $473.455 million of Series 2025B refunding bonds, serials 2026-2045; and $364.55 million of Series 2025C refunding bonds, serials 2036-2040. Wells Fargo.
The Los Angeles Department of Water and Power (Aa2//AA-/AA-/) is set to price Thursday $993.525 million of power system revenue bonds, 2025 Series A. Barclays.
The Black Belt Energy Gas District (/A-//) is set to price Thursday $659.2 million of gas project revenue bonds, 2025 Series A, serials 2027-2032, 2055. J.P. Morgan.
The Port Authority of New York and New Jersey (Aa3/AA-/AA-/) is set to price Tuesday $498.9 million of consolidated refunding bonds, two hundred forty-eighth series, serials 2026-2045, terms 2050, 2055. J.P. Morgan.
The state is also set to price Wednesday $246.87 million of GO interstate bridge replacement project bonds, 2025 Series E, serials 2026-2045, term 2049. BofA Securities.
The Colorado Educational and Cultural Facilities Authority is set to price Wednesday $291.71 million of the Stanley Project cultural facilities revenue bonds, consisting of $210.235 million of senior lien bonds Series 2025A-2, term 2059; $31.29 million taxable senior lien bonds, Series 2025A-2, term 2045; and $50.185 million of subordinate lien bonds, Series 2025B, term 2059. RBC Capital Markets.
The Indiana Finance Authority (/AAA/AAA/) is set to price Wednesday $274.61 million of green state revolving fund program refunding bonds, Series 2025C, serials 2026-2046. Truist.
The city of St. Paul Housing and Redevelopment Authority, Minnesota, (A2/A//) is set to price Tuesday $271.305 million of HealthPartners Obligated Group health care facilities revenue refunding bonds, serials 2025-2035. Piper Sandler.
The hospital system is also set to price $154.975 million of taxable Series 2025C bonds. Morgan Stanley.
The University of the North Texas System Board of Regents (Aa2//AA/AA/) is set to price Tuesday $215.05 million of tax-exempt revenue financing system refunding and improvement bonds, Series 2025A, serials 2026-2045, term 2050. Wells Fargo.
The board of regents is also set to price $108.615 million taxable revenue financing system refunding and improvement bonds, Series 2025B, serials 2026-2040, term 2045. Raymond James.
The Northside Independent School District, Texas, (Aaa//AAA/) is set to price Tuesday $200.935 million of PSF-insured unlimited tax school building bonds, serials 2026-2045, terms 2050, 2055. Stifel.
The Tennessee Housing Development Agency (Aa1/AA+//) is set to price Wednesday $200 million of non-AMT social residential finance program bonds, Issue 2025-1A, serials 2026-2037, terms 2040, 2045, 2050, 2055, 2056. RBC Capital Markets.
The Build NYC Resource Corp. (/BBB+//) is set to price Thursday $196 million of TRIPS Obligated Group senior airport facilities revenue bonds. J.P. Morgan.
Howell Public Schools, Michigan, (/AA//) is set to price Tuesday $183.865 million of 2025 school building and site bonds, Series II, serials 2026-2045, insured by the Michigan School Bond Qualification and Loan Program. J.P. Morgan.
The Rhode Island Student Loan Authority (/AA//) is set to price Wednesday $125 million of senior education loan revenue bonds, consisting of $100 million of AMT Series 2025A bonds, serials 2029-2034, term 2044, and $25 million of taxable Series 2025-1 bonds, serial 2044. RBC Capital Markets.
The Denver Health and Hospital Authority, Colorado, (/BBB/BBB/) is set to price Thursday $116.37 million of healthcare revenue refunding bonds, Series 2025A, terms 2045, 2050, 2055. Piper Sandler.
The Modesto High School District, California, (Aa2///) is set to price Tuesday $113 million of Election of 2022 GOs, Series B, serials 2026-2045, terms 2050, 2054. Piper Sandler.
Prince William Water, Virginia, (Aaa/AAA//) is set to price Tuesday $105.925 million of water and sewer system revenue and refunding bonds, serials 2026-2055. Raymond James.
The Oklahoma Housing Finance Agency (Aaa///) is set to price Tuesday $100 million of non-AMT homeownership loan program single-family mortgage revenue bonds, serials 2026-2037, terms 2040, 2045, 2049, 2056. Raymond James.
The University of North Carolina at Chapel Hill (Aaa/AAA/AAA/) is set to price Wednesday $100 million of general revenue bonds, Series 2012B. Wells Fargo.
Competitive
Delaware is set to sell $315.77 million of GOs at 10:45 a.m. Tuesday.
Shelby County, Tennessee, is set to sell $275.91 million of GO public improvement and school bonds, 2025 Series A, at 11 a.m. Tuesday.
