The municipal market is facing never-before-seen challenges. A work-from-home workforce scattered about, liquidity constraints, ever-growing credit concerns and a mostly shut down economy that still somehow must provide market access.
Like the middle of March, the tone in the market has moved from a strong seller’s market to one where bidders could name their price.
Credit concerns are impacting the municipal market in a large way, according to Karel Citroen, head of municipal research at investment manager Conning.
“The spread widening is causing deals that were set to price, either get repriced or postponed, now showing up as day-to-day,” Citroen said Thursday before the close of trading.
“I believe two things are happening; at more attractive levels one is starting to see good crossover demand come in, and, at the same time, the traditional investor base is becoming more concerned with the credit implications of the COVID-19 virus,” Citroen said.
(Read more: The Bond Buyer)
