Municipal Bond Issuance Calendar
Monday, July 14, 2025
- Issuer: City of Chicago, IL
- Deal Size: $800 million
- Structure: General Obligation (GO) bonds, fixed-rate, 20-year maturity with a 10-year call provision.
- Credit Quality: Rated A3 (Moody’s) / A- (S&P), reflecting stable but constrained fiscal flexibility due to pension obligations.
- Sale Type: Competitive. Strong investor interest expected due to the issuer’s essential urban market presence, though pricing may reflect credit concerns.
- Issuer: Los Angeles County Metropolitan Transportation Authority, CA
- Deal Size: $500 million
- Structure: Revenue bonds backed by sales tax receipts, 30-year maturity, 5% coupon.
- Credit Quality: Aa2 (Moody’s) / AA (S&P), underpinned by consistent tax revenue streams.
- Sale Type: Negotiated. Likely to attract institutional buyers seeking high-quality, long-dated securities.
Tuesday, July 15, 2025
- Issuer: Texas Water Development Board
- Deal Size: $600 million
- Structure: Revenue bonds for water infrastructure, 25-year maturity, callable in 2035.
- Credit Quality: Aaa (Moody’s) / AAA (S&P), reflecting robust state backing and low default risk.
- Sale Type: Competitive. Expected to price tightly due to high credit quality and demand for water-related infrastructure debt.
Wednesday, July 16, 2025
- Issuer: New York City Municipal Water Finance Authority
- Deal Size: $1.2 billion
- Structure: Revenue bonds for water and sewer upgrades, mixed maturities (10-30 years), primarily fixed-rate with some floating-rate notes.
- Credit Quality: Aa1 (Moody’s) / AA+ (S&P), supported by stable utility revenues.
- Sale Type: Negotiated. Anticipated strong demand from mutual funds and SMAs due to attractive tax-exempt yields.
Thursday, July 17, 2025
- Issuer: Florida Development Finance Corporation
- Deal Size: $300 million
- Structure: Private activity bonds for healthcare facility expansion, 15-year maturity, callable after 7 years.
- Credit Quality: Baa2 (Moody’s) / BBB (S&P), reflecting moderate credit risk in the healthcare sector.
- Sale Type: Negotiated. Likely to see selective buying from high-yield municipal funds.
Friday, July 18, 2025
- No major deals scheduled. Smaller refunding issues and secondary market activity expected to dominate.
Week-Long Outlook
This week’s issuance volume is projected at approximately $3.4 billion, slightly above the 2025 year-to-date average. The mix of competitive and negotiated sales reflects issuers’ strategies to balance cost and market access. High-grade issuers like Texas and New York are likely to see robust demand, while Chicago’s offering may face scrutiny due to credit concerns. Investors should focus on longer-maturity bonds with call protection to capture higher yields amid a steepening yield curve.
Municipal Market Data Yield Curve Information
The AAA Municipal Market Data (MMD) yield curve has steepened slightly, with 10-year yields at 4.05% and 30-year yields at 4.85% as of July 11, 2025. Short-term yields (1-5 years) remain stable at 3.50%-3.75%, reflecting expectations of Federal Reserve rate cuts in late 2025. The taxable-equivalent yield for top-bracket investors approaches 7.5% for 30-year maturities, making munis attractive relative to Treasuries (10-year Treasury at 4.20%). The curve’s steepness favors longer-duration strategies, though callable bonds require careful yield-to-call analysis to avoid reinvestment risk.
Market Sentiment
- Trading Flows: Municipal bond mutual funds saw inflows of $250 million last week, marking 12 consecutive weeks of positive flows. High-yield funds continue to outperform, with $150 million in inflows, driven by demand for higher tax-exempt income.
- Secondary Market Performance: Trading activity remains robust, with average daily volume up 5% from June levels. Lower-rated bonds (BBB and below) outperformed AAA bonds last week, returning 0.8% versus 0.3%, as credit spreads tightened.
- Dealer Positioning: Dealers are maintaining lean inventories, focusing on new issues to meet institutional demand. However, liquidity challenges persist in the secondary market, particularly for smaller, less liquid issues, contributing to price volatility.
- Week-Long Outlook: Expect continued inflows into municipal funds, particularly for intermediate and long-dated bonds. Secondary market trading may slow toward the week’s end as investors digest new issuance.
Policy & Legislative Context
- Federal Tax Law: Current tax brackets and municipal bond tax exemptions are expected to remain intact through 2025, supporting demand for tax-exempt securities. However, discussions around potential Medicaid cuts could pressure healthcare and state issuers, reducing financial flexibility.
- Infrastructure Funding: Recent federal grants for transportation and water projects are encouraging issuance, as seen in Texas and New York deals. Investors should monitor for potential shifts in federal funding priorities, which could impact project-specific revenue bonds.
- Monetary Policy: The Federal Reserve’s signal of one to two rate cuts by Q1 2026 continues to shape expectations. A dovish stance could further steepen the yield curve, benefiting longer-duration munis.
- Week-Long Outlook: No major policy announcements are expected this week, but investors should stay alert for updates on infrastructure spending, which could influence issuance volumes.
Macro-Economic Context
- Key U.S. Data Releases:
- Tuesday, July 15: Consumer Price Index (CPI) for June, expected to show inflation moderating to 3.1% year-over-year. Softer inflation could reinforce rate-cut expectations, supporting muni demand.
- Thursday, July 17: Retail Sales for June, projected to rise 0.3%. Strong consumer spending may bolster sales tax-backed bonds but could temper rate-cut hopes, lifting yields slightly.
- Friday, July 18: Housing Starts, expected to remain flat. Weakness in housing could signal economic slowdown, enhancing munis’ appeal as a safe-haven asset.
- Impact on Tax-Exempt Yields and Demand: Stable or declining inflation supports expectations of lower yields, increasing demand for munis as a tax-efficient income source. However, stronger-than-expected retail sales could push yields higher, pressuring bond prices.
- Week-Long Outlook: The CPI release will be the key driver. A lower-than-expected reading could drive yields down by 5-10 basis points, boosting demand for new issues. Conversely, robust retail sales may temper enthusiasm for longer maturities.
Disclaimer
Disclaimer: This AI-generated analysis is provided for informational purposes only and should not be considered as investment advice.