The municipal bond market was steady Thursday amid the pricing of several new issues, including a low-rated Guam Waterworks $134 million deal. Despite the market’s recent firmness, however, a real sense of caution is coming into play. Some sources say the municipal market needs to begin pricing in downside risk from the coronavirus-led revenue losses for issuers across the country, and that the market is largely ignoring the potential of real risk of impairments and defaults. Municipal to U.S. Treasury ratios have been a focus for many participants of late. Historically attractive ratios, low supply, and continued fund inflows are creating some strength in the municipal market.
(Read more: The Bond Buyer)
