Weekly Market Update

10-YEAR TREASURY YIELD BREAKS 3%

Thursday, April 26, 2018

This week, the 10-year U.S. Treasury yield exceeded 3% for the first time since 2014 amid increased supply and more predicted rate hikes by the Federal Reserve. The Treasury department issued $96 billion of notes this week with yields approaching multi-year highs, while the U.S. budget deficit will surpass $1 trillion by 2020, two years faster than expected. Further, the Fed has forecast two additional rate hikes in 2018, while the market is pricing in more potential increases. In the municipal market, AAA benchmark yields increased 20 basis points on the long end of the curve over the past week. Additionally, municipal bond mutual funds had outflows of nearly $800 million last week.

In Other News

  • Eastern Michigan University entered into a concession agreement for its Ypsilanti campus parking operations with Preston Hollow Capital, in exchange for a $55 million upfront payment and $4 million in campus parking enhancements.
  • Google has matched Beyonce's donation of $100,000 to four Historically Black Colleges and Universities. Texas Southern University, Fisk University, Grambling University, and Morehouse College will each receive $25,000 toward scholarships.
  • Morgan State University's Earl G. Graves School of Business and Management and the Wharton School of the University of Pennsylvania are creating a partnership to promote diversity at each institution.
  • The University of Maryland received a $21.25 million donation to establish an academic center for student-athletes.
  • Texas A&M University and CHI St. Joseph Health have announced plans to establish a co-branded primary care network. Graduate students at Texas A&M's medical school will benefit from training at the network's sixteen primary care locations.
  • The Commission on College Basketball recommended significant changes to NCAA Division I basketball, including ending the "one-and-done" rule, harsher penalties on violations, and cutting down on recruiting events hosted by apparel companies.

Rating Agency Update

  • Moody's affirmed Rollins College's A2 rating. The outlook is stable.
  • Moody's assigned Baa1 to Allegheny College's Series 2018A and 2018B Refunding Bonds. The outlook is revised from stable to negative.
  • Moody's affirmed Washburn University of Topeka's A1 rating. The outlook is stable.
  • Moody's affirmed Hanover College's Baa2 rating. The outlook is revised from stable to negative.
  • Moody's assigned Aaa to Columbia University's Series 2018A and 2018B Revenue Bonds. The outlook is stable.
  • Moody's affirmed Brooklyn Law School's Baa1 rating. The outlook is revised from stable to negative.
  • Moody's affirmed University of San Francisco's A2 rating. The outlook is stable.
  • Moody's assigned A1 to Case Western Reserve University's Series 2018 Refunding Bonds. The outlook is stable.
  • Moody's assigned Aa1 to Pennsylvania State University's Series 2018 Bonds. The outlook is stable.
  • Moody's downgraded Rogers State University's rating from A3 to Baa1. The outlook is negative.
  • Moody's assigned Aa3 to the University of Central Florida's Series 2018A Parking Bonds. The outlook is stable.
  • S&P assigned AA- to the University of Central Florida's Series 2018A Bonds. The outlook is stable.
  • Moody's assigned Aaa to the University of Virginia's Series 2018A and 2018B General Revenue Pledge Bonds. The outlook is stable.
  • S&P assigned AA- to Oklahoma State University's Series 2018A and 2018B General Revenue Bonds. The outlook is stable.
  • S&P affirmed Widener University's BBB rating. The outlook is revised from stable to positive.
  • S&P affirmed Springfield College's BBB rating. The outlook is stable.
  • S&P affirmed University of North Alabama's A rating. The outlook is revised from stable to negative.
  • S&P affirmed Hawaii Pacific University's BB rating. The outlook is stable.
  • S&P affirmed Haverford College's AA- rating. The outlook is stable.
  • S&P downgraded the University of Northern Colorado's rating from A to A-. The outlook is stable.