Municipals were little changed Wednesday as two billion-dollar-plus deals from the Dormitory Authority of the State of New York and CommonSpirit Health took focus. U.S. Treasuries were weaker and equities were mixed.
The two-year muni-to-Treasury ratio Wednesday was at 59%, the three-year at 59%, the five-year at 57%, the 10-year at 57% and the 30-year at 82%, according to Refinitiv Municipal Market Data's 3 p.m. EST read. ICE Data Services had the two-year at 60%, the three-year at 58%, the five-year at 58%, the 10-year at 59% and the 30-year at 82% at 3 p.m.
The Investment Company Institute reported larger inflows into municipal bond mutual funds for the week ending March 6, with investors adding $956 million to funds following $57 million the week prior.
ICI reports exchange-traded funds saw inflows of $622 million following $320 million of inflows the week prior.
The first wave of data came through and munis "weathered" a stronger Consumer Price Index report "without much notice while USTs faded about five basis points," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.
Further data releases, along with large New York and healthcare pricings "could jar some stale items — especially if USTs offer some hedge relief," she said.
"Select secondary trades out the curve were one to two basis points softer" but represented recycled sectors, such as Permanent School Funds and Massachusetts GOs, "without any larger wholesale adjustment — for the moment," she said.
Limited selling has led to generic high-grade structures remaining "well insulated," Olsan said.
Bid wanteds have topped $1 billion for three straight sessions, according to Bloomberg.
There were only two out of the 10 largest blocks posted to the bid platform Tuesday, that maturity dates past 10 year, she said.
"The gradation of trading spreads is quite evident in the popular 3.00%-plus yield-to-worst in this range — Aaa/AAA Oklahoma Water 5s due 2043 (callable 2031) were issued in January at +37/MMD and have tightened to around +15/MMD in recent activity," she said.
Through mid-March, "dealer-to-customer buying is fairly balanced along the curve (exception being modestly more active customer buying in the 1-3 year range) as various investment strategies are employed — defensive shorts, intermediate laddered structures and longer-dated duration allocations," Olsan noted.
The market's focus for the rest of the week is on the mega deals from the Dormitory Authority of the State of New York and CommonSpirit Health bonds from the issuer and through state conduits from California and Colorado.
In the primary market Wednesday, RBC Capital Markets preliminarily priced for institutions $2.908 billion of general-purpose state personal income tax revenue bonds from the Dormitory Authority of the State of New York (Aa1//AA+/AAA/). The first tranche, $2.843 billion of tax-exempt general purpose state personal income tax revenue bonds, Series 2024A, saw yields bumped up to six basis points on the short end from Tuesday's retail pricing, with 5s of 3/2026 at 2.85% (-6), 5s of 2029 at 2.70% (unch), 5s of 2034 at 2.75% (unch), 5s of 2039 at 3.22% (unch), 5s of 2044 at 3.70% (unch), 5.25s of 2049 at 3.94% (unch) and 4s of 2054 at 4.25% (unch), callable 3/15/2034.
Details for the second tranche, $64.815 billion of taxables, Series 2024B, were not available as of 3 p.m. Wednesday.
For the DASNY pricing, a larger New York slate will "likely mean opportunity for new inquiry to take advantage of a supply dislocation," Olsan said.
Morgan Stanley priced and repriced $1.003 billion of revenue bonds for CommonSpirit Health through the California Health Facilities Financing Authority and the Colorado Health Facilities Authority.
Morgan Stanley priced for the California Health Facilities Financing Authority (A3/A-/A-/) $285.190 million of Series 2024A, with yields bumped eight to 20 basis points from Wednesday's preliminary pricing: 5s of 12/2025 at 2.92% (-8). 5s of 2029 at 2.62% (-8), 5s of 2034 at 2.77% (-8), 5s of 2039 at 3.22% (-10), 5s of 2044 at 3.65% (-10), 5.25s of 2049 at 3.87% (-12) and 5s of 2054 at 3.97% (-20), callable 6/1/2034.
Morgan Stanley also priced for the Colorado Health Facilities Authority (A3/A-/A-/) $720.795 million of Series 2024B, yields bumped two to 17 basis points from Wednesday's preliminary pricing: 5s of 12/2029 at 2.92% (-3), 5s of 2034 at 3.03% (-2), 5s of 2039 at 3.37% (-10) and 5s of 2054 at 4.10% (-17), callable 6/1/2034.
For the CommonSpirit Health pricing a "recent Moody's upgrade to A3 and the A- S&P rating broaden the issuer's reach into the market," according to Olsan.
Elsewhere in the primary market, BofA Securities priced for Clark County, Nevada, (Aa2//AA-/AA-/) $318.720 million of non-AMT airport system subordinate lien refunding revenue bonds, Series 2024A, with 5s of 7/2025 at 3.00%, 5s of 2029 at 2.67% and 5s of 2032 at 2.71%, noncall.
Jefferies priced for William County, Texas, (/AAA/AAA/) $291.960 million. The first tranche, $140.725 million of unlimited tax road bonds, with 5s of 2/2026 at 2.82%, 5s of 2029 at 2.65%, 5s of 2034 at 2.66%, 5s of 2039 at 3.02% and 5s of 2044 at 3.52%, callable 2/15/2034.
The second tranche, $155.755 million of limited tax notes, with 5s of 2/2025 at 3.09%, 5s of 2029 at 2.65% and 5s of 2031 at 2.68%, noncall.
J.P. Morgan priced for the Ohio Housing Finance Authority (Aaa///) $199.995 million of non-AMT social Mortgage-Backed Securities Program residential mortgage revenue bonds, Series 2024A, with 5s of 2/3025 at 3.00%, 5s of 3/2029 at 3.12%, 5s of 9/2039 at 3.12%, 3.65s of 3/2034 at par, 3.75s of 9/2034 at par, 3.95s of 9/20309 at par, 4.35s of 9/2044 at par, 4/55s of 9/2049 at par, 4.65s of 9/2054 at par and 6.25s of 3/2055 at 3.83%, callable 9/1/2033.
There are other large deals on the horizon.
The New York State Environmental Facilities Corp. (Aaa/AAA/AAA/) is set to price March 21 $722.505 million of State Clean Water and Drinking Water Revolving Funds revenue bonds.
The Metropolitan Transportation Authority is set to price next week $1.2 billion of climate bond certified transportation revenue refunding green bonds.
The California State of Public Works Board is set to price the week of April 1 $940 million of lease revenue bonds.
The Massachusetts Development Finance Agency is set to price in April $900 million of Harvard University revenue bonds.
The Kentucky State Property and Building Commission is set to price the week of April 8 $649 million of Project No. 130 revenue and refunding bonds.
AAA scales
Refinitiv MMD's scale was little changed: The one-year was at 2.95% (unch) and 2.73% (+2) in two years. The five-year was at 2.40% (unch), the 10-year at 2.40% (unch) and the 30-year at 3.57% (unch) at 3 p.m.
The ICE AAA yield curve was little changed: 2.96% (unch) in 2025 and 2.74% (unch) in 2026. The five-year was at 2.41% (unch), the 10-year was at 2.43% (unch) and the 30-year was at 3.51% (unch) at 3 p.m.
The S&P Global Market Intelligence municipal curve was cut up to one basis point: The one-year was at 2.94% (+1) in 2025 and 2.72% (+1) in 2026. The five-year was at 2.41% (+1), the 10-year was at 2.40% (unch) and the 30-year yield was at 3.54% (unch), according to a 3 p.m. read.
Bloomberg BVAL was unchanged: 2.91% in 2025 and 2.76% in 2026. The five-year at 2.38%, the 10-year at 2.44% and the 30-year at 3.58% at 3 p.m.
Treasuries were weaker.
The two-year UST was yielding 4.626% (+3), the three-year was at 4.375% (+3), the five-year at 4.192% (+4), the 10-year at 4.197% (+4), the 20-year at 4.453% (+4) and the 30-year at 4.352% (+4) at 3:15 p.m.
Primary to come
The Idaho Housing and Finance Association (Aa1//AA+/) is set to price Thursday $331.510 million of Transportation Expansion and Congestion Mitigation Fund sales tax revenue bonds, Series 2024A. J.P. Morgan.
The Virginia Housing Development Authority (Aaa/AAA//) is set to price Tuesday $160 million of taxable commonwealth mortgage bonds, 2024 Series A, serials 2025-2033, terms 2039, 2044, 2049, 2054. Raymond James.
Fairfax County, Virginia, (Aaa/AAA/AAA/)is set to price Thursday $124.135 million of sewer revenue bonds, Series 2024A. Morgan Stanley.
The Louisiana Housing Corp. (Aaa///) is set to price Thursday $110 million of Home Ownership Program single family mortgage revenue bonds, $100 million of non-AMT bonds, Series 2024A, and $10 million of taxables, Series 2024B. Raymond James.
The California Municipal Finance Authority (/BBB+//) is set to price Thursday $100 million of Republic Services Project solid waste disposal revenue bonds, Series 2024A, serial 2054. BofA Securities.
