AmeriVet Weekly Muni Snapshot
Municipal New Issuance: Last week’s negotiated calendar totaled to just over $5.5 billion for the week with the largest deal of the week being the $1.29 billion Metropolitan Transportation Authority issuance which AmeriVet participated in the Selling-Group. This was the first time that the MTA sold fixed-rate transportation revenue bonds since February 2021. The next largest deal of the week was the New York City Municipal Water Finance Authority which issued $722 million. The New York City Municipal Water Finance Authority repriced it’s bonds with lower yields than the original pricing. The New Jersey Turnpike Authority also issued $500 million. |
Municipal Secondary Trading: Secondary trading for the week totaled to over $36.19 billion with 51% of the trades being dealer sells. According to Bloomberg, clients put up roughly $6.9 billion up for the bid with Friday having the largest amount of bids-wanted with $1.74 billion up for the bid. |
Municipal Spreads: Last week, muni yields rose for the first time in six weeks this past week with yields on 10-year notes rising by 3.1 basis points to 2.48% with the average yield across the curve rising by 2.2 basis points during the six-week period. With the rise in yields this past week, munis underperformed Treasuries with 10-year munis now yielding 58.96% of Treasuries, compared to the prior week when the ratio was at 56.90%. We did see the muni curve flatten this past week by 4.1 basis points to end the week at 80 basis points. |
According the LSEG Lipper Global Fund Flows data, municipal bond mutual funds continue to see inflows as investors added roughly $64 million to municipal bonds funds last week This follows last week’s inflow of $300 million and marks the fifth straight weeks of inflows. |
After hitting a four year low on Monday, the 10-year ratio did rise by 2.06 percentage points by Friday. Although we did see munis cheapen on a relative value basis to Treasuries, we are still in rich territory as we are still well below the 10-year average for 10-year notes which is roughly 87.48%. There isn’t much that is fundamentally different with munis compared to a few weeks ago as demand continues to grow. We should expect to see munis underperform Treasuries as a result of the increase in supply this week. |
Municipal Supply: This week, the negotiated calendar will have an expected volume of $8.69 billion with the three largest deals taking up almost 60% of the calendar. AmeriVet will be in the Selling-Group for the two largest deals for the week which will be the $2.67 billion State of California GO issue and the $1.45 billion City of New York issuance. The third largest deal of the week will be the $1.8 billion State of Washington issuance. Currently, supply is roughly 32% higher than last year. |