- Primary market: The most significant sales expected to be priced today include a $1 billion issue for the New York City Transitional Finance Authority Future Tax Secured Revenue and a $540 million issue for the Commonwealth of Massachusetts. This is the second $1 Billion new issue to NYC recently.
- Munis could see some additional weakness next week as the market adjusts to where Treasuries have moved. Across the curve, the most significant margin of outperformance was in the shortest debt, with AAA Muni rates declining 15 bps, compared with Treasury rates' 1.5-bp increase. At the long end of the curve, performance flipped, with munis falling 13.1 bps vs. Treasuries' 14.8-bp drop.
- The Washington Metropolitan Area Transit Authority is considering a 12.5% fare increase starting in July to address a budget shortfall. There were discussions about significant service cuts, but that has been shelved to prioritize fare hikes. Additionally, there were talks about reducing the workforce, which currently stands at 12,000 employees, but this option is no longer on the table. We could see more news like this on similar structures. The pandemic still has lingering effects on some major cities' transportation systems.
- Investors are returning to the municipal bond market, marking a significant shift from the disinterest over the past two years. Capital has been flowing back into municipal bond funds consistently for the fifth consecutive week, reaching a notable two-year peak of $1.5 billion in weekly inflows. Despite having withdrawn over $120 billion in the last two years, investors are now enticed by the market's potential for higher yields in anticipation of forthcoming interest rate cuts.
- Barton College, a private college predominantly enrolling North Carolina students, was downgraded one notch to BB+ by S&P Global Ratings. We could continue to see downgrades in colleges in the years to come. Colleges are having lower enrollments, and costs for students are getting higher.
At The DRL Group, we specialize in helping high-net-worth investors maximize tax-free returns by proactively maintaining their custom bond portfolios through all market conditions.
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New Edge Securities, Inc. has no affiliation with Bond Desk Trading LLC, Bond Trader Pro, Tradeweb Direct, Bondpoint, TMC, or any other ECN. Yield to call (YTC) does not indicate total return; this yield is valid only if the security is called. Bonds may or may not be called or be callable on multiple dates or, in other cases, called on any date following the first call date, so yield to call is based on the earliest stated call date. Discounted bonds may be subject to capital gains tax. Bonds may be subject to OID (Original Issue Discount). Prices and availability may change at any time without notice. Do not buy discount bonds based on the Yield to Call (YTC). Insured bonds are issued for timely payment of principal and interest only. Insured bonds do not cover potential market loss and are subject to the insurance company's claims-paying ability. Non-rated (NR), Withdrawn (WR), or below investment grade bonds, lower-rated bonds carry a greater potential risk of default & should be considered by sophisticated investors only. Bonds may be subject to capital gains tax. This summary is for informational purposes only and is not an offer or solicitation for the purchase or sale of any security or a recommendation or endorsement of any security or issuer. New Edge Securities, Inc. and The DRL Group make no representation about the accuracy, completeness, or timeliness of this information. Bonds could also be subject to the DeMinimis Rule; please consult your tax advisor for further clarification.
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Bonds are subject to market and interest rate risk if sold before maturity. Prices and availability may change at any time without notice. Insured bonds are subject to the claims-paying ability of the insurance company.
Bonds could also be subject to the De Minimis Rule; please consult your tax advisor for further clarification.
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