Municipal Bonds Weekly Market Report: August 23

MunicipalBonds.com provides information regarding the performance of muni bonds for the past week in comparison with Treasury yields, as well as details regarding the net inflow in the muni market.

Treasury as well as muni yields rose last week, whereas muni bond yields were stable.

There was a notable upgrade for the Oakmont Public Utility District, TX’s GOULT Bonds rating by Moody’s, the details of which are provided below.

We also provide a quick update on the Puerto Rican bond market.

Full-Week Bond Market Summary for Aug 15-19

Treasury yields fluctuated over the week, but closed on the higher note.

2- & 10- year muni bond yields remained unchanged last week.

5- & 30-year muni bond yields decreased by 1 bps.

The market’s eyes will be on Janet Yellen’s speech at the Jackson Hole Economic Policy Summit later this week.

Detailed Report

Treasury yields were mainly driven by the Fed’s meeting last week and movements in global equities.

Treasury yields were volatile over the week, but rose on Friday in response to the increase on yields in the UK market.

5-year Treasury yield rose the highest, by 7 bps.

The market is looking forward to Janet Yellen’s speech at the Jackson Hole Economic Policy Summit later this week.

It is highly anticipated that Yellen will be commenting on the timing of the next rate hike.

Muni bond prices were held steady last week, due to minimal changes in muni yields.

New issue supply of $6.5B was well absorbed.

Fund flows were positive for the 46th consecutive week.

This week’s new issuance is expected to be as high as $9B.

Though the muni bond yield has not changed drastically in the month of August, the muni bond market has still been able to maintain its positive flow.

Yields for the indices following the Puerto Rican bond market increased, due to an increase in yields for Puerto Rico bonds last week.

Moody’s Upgrade/Downgrade

Upgrades:

Oakmont Public Utility District, TX’s GOULT:

Moody’s Investors Service has upgraded Oakmont Public Utility District, TX’s GOULT to A2. It reflects the district’s trend of strong assessed-value growth, and a steady decline in debt burdens. Significant, sustained tax-base expansion and reduction to its current debt burden could lead to a further upgrade.

Downgrades:

City of Jackson, MS GO:

Moody’s Investors Service has downgraded the City of Jackson, MS’s GO rating to Baa2 from A3. It reflects the persistent and significant contraction of the city’s reserve and liquidity position due to operational imbalance. Operational balance and substantial tax-base growth could lead to an upgrade in rating.