Municipal New Issuance: Last week’s negotiated calendar totaled to just over $9.2 billion with the largest deals being the $1.3 billion New York City Municipal Water Finance Authority which AmeriVet was in the Selling-Group. The deal garnered so much demand that they added $600 million to the deal and was 4 times oversubscribed. The second largest deal of the week was the $1 billion University of California Regents. Harvard College also issued this week by issuing $750 million in taxable bonds which was pre-marketed at +65 to US Treasuries, then initially sold at +60 and finally priced at +47 to Treasuries. AmeriVet was also in one of the issues for the week as a Selling-Group-Member which was the $14.7 million Maryland Department of Housing.

Municipal Secondary Trading: Secondary trading for the week totaled to just over $36.33 billion with 54% of the trades being dealer sells. According to Bloomberg, clients put up roughly $4.54 billion up for the bid with Wednesday having the largest amount of bids-wanted with $1.15 billion up for the bid.

Municipal Spreads: Last week muni yields fell with 10-year notes falling by 6.5 basis points to 2.46%. With yields falling we did see munis outperform Treasuries slightly as 10-year munis are now yielding 60.37% of Treasuries compared to 60.42% from the prior week. We did see a slight flattening of the curve with the curve flattening by .3 basis points to 87 basis points.

According to LSEG Lipper Global Funds Flows data, municipal bond mutual funds once again saw inflows into their funds as investors added about $869 million to municipal bond funds. This follows last week’s inflow of $72 million. In the past four weeks, the moving average is approximately $241.1 million of inflows.

For the past several weeks, munis continue to see strong demand for bonds which has pushed munis to be richer on a relative value basis versus Treasuries. Currently, the 10-year ratio is at 60% which is well below the five-year average of 83%. The high demand for bonds is present as we have seen issuers increase their debt sale in recent weeks, one in particular was the New York City Water issue which increased the size of the issuance by $600 million. The high demand for munis has also pushed yields even lower as we saw last week in the Harvard issuance as they bumped the deal by 18 basis points from initial pre-marketing for their taxable issue. For Harvard’s tax-exempt issue, they saw spreads as low as -36 in the front end. It appears that investors are looking to lock-in the higher yields being offered today ahead of any Fed rate cuts that may come down the line this year.

Municipal Supply: This week, the negotiated calendar will have an expected volume of just over $9.5 billion. The largest deal of the week will be the $2.97 billion Dormitory Authority of State of New York which will include taxable and tax-exempt bonds. The next largest deal of the week will be the CommonSpirit Health taxable bonds issuance which plans on issuing $1.7 billion using a corporate cusip. The California Health Facilities Financing Authority plans on selling just over $1 billion.