Munis were steady to slightly firmer on Wednesday, as the asset class saw small gains, though not large enough to completely pare losses from Tuesday’s selloff. U.S. Treasuries richened and equities finished higher on hopes of a resolution to the war with Iran.
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Muni yields were bumped up to three basis points, depending on the curve, while UST yields richened by four to 10 basis points.
Ajay Thomas, head of public finance at FHN Financial, said the market has been “totally driven” by headlines out of the Middle East this week. Barring any major developments in Iran, Thomas expects the market to be calmer for the remainder of the week.
Investors had “a reaction and a re-reaction,” Thomas said. “With [Tuesday’s]’ transactions, we saw a lot of unsold balances left in deals. We’ve seen the … universe of participating investors become a lot thinner, much more selective, more cautious in making purchases. We expect that’ll continue as supply continues to stay elevated on a weekly basis, for the balance of the month.”
ICI reports
The Investment Company Institute Wednesday reported inflows of $1.902 billion for the week ending May 13, following $1.086 billion of inflows the previous week.
Exchange-traded funds saw inflows of $1.056 billion after $1.289 billion of inflows the week prior, per ICI data.
New-issue market
In the primary market Wednesday, Goldman Sachs priced for PEFA, Inc. (Aa3///) $955.45 million of gas project revenue refunding bonds, Series 2026A, with 5s of 4/2027 at 3.70%, 5s of 2031 at 4.06% and 5s of 2035 at 4.46%, callable 1/2035.
BofA Securities priced for the Triborough Bridge and Tunnel Authority (/AA-/AA-/AA/) $893.66 million of general revenue bonds, Series 2026A. The first tranche, $525 million of Subseries 2026A-1 bonds, saw 5s of 11/2035 at 3.38%, 5s of 2036 at 3.45%, 5s of 2041 at 3.89%, 5s of 2046 at 4.38%, 5.25s of 2051 at 4.69% and 5.5s of 2056 at 4.70%, callable 11/2036.
The second tranche, $368.66 million of Subseries 2026A-2 refunding bonds, saw 5s of 11/2026 at 2.67%, 5s of 2031 at 3.03%, 5s of 2036 at 3.45%, 5s of 2041 at 3.89%, 5s of 2046 at 4.38% and 5s of 2048 at 4.67%, callable 11/2036.
BofA Securities priced for the Philadelphia School District (Aa3//AA-/) $803.58 million of GOs. The first tranche, $331.56 million of Series 2026A, saw 5s of 9/2027 at 2.97%, 5s of 2031 at 3.30%, 5s of 2036 at 3.66%, 5s of 2041 at 4.09%, 5s of 2046 at 4.50% and 5.5s of 2051 at 4.69%, callable 9/2036.
The second tranche, $363.975 million of Series 2026B, saw 5s of 9/2027 at 2.97%, 5s of 2031 at 3.30%, 5s of 2036 at 3.66% and 5s of 2038 at 3.86%, callable 9/2036.
The third tranche, $108.045 million of Series 2026C, saw 5s of 9/2027 at 2.97% and 5s of 2031 at 3.30%, noncall.
Goldman Sachs priced for the Oklahoma City Public Property Authority (Aa1///) $780.3 million of arena sales tax revenue bonds, Series 2026, with 5s of 6/2029 at 3.07%, 5s of 2031 at 3.25% and 5s of 2034 at 3.40%.
