Municipal New Issuance: Last week’s negotiated calendar totaled to just over $10.3 billion for the week with the $950 million Harris County Texas issuance being the largest deal last week. The second largest issuance of last week was the Los Angeles Community College deal which issued $742 million in tax-exempt bonds and $100 million in taxable bonds. AmeriVet participated in multiple deals this past week as a Co-Manager, the first being the Pennsylvania Housing Finance Agency which issued $374 million in tax-exempt bonds and 75 million in taxable bonds. AmeriVet also participated as a Co-Manager on the $190 million Wisconsin Housing and Economic Development Authority issuance. AmeriVet also participated in the Selling-Group for the Florida Housing Finance Corporation which issued $150 million in taxable bonds and $100 million in tax-exempt bonds. Lastly, AmeriVet was in the $46 million New Hampshire Housing issue as a Selling-Group-Member.

Municipal Secondary Trading: Last week, secondary trading totaled to roughly $35.6 billion with 55% of all trades being dealer sells to clients. According to Bloomberg, clients put up roughly $5.8 billion up for the bid. This figure is below the total amount of bids from the prior week’s total of $6.37 billion, largely due in part to the early close on Friday for the Memorial Day holiday.

Municipal Spreads: Muni yields rose sharply this past week with 10-year notes rising by 33.6 basis points to 3.00%. With the sharp rise in yields, munis did underperform Treasuries as munis are now yielding 67.31%, compared to the prior week when that same ratio was at 60.38%. With yields rising sharply in the front end, the muni curve flattened by 12.5 basis points this past week to 59 basis points, the flattest since Bloomberg began record-keeping.

For the second straight week in a row, municipal bond funds saw investors pull money out of their funds to the tune of approximately $218 million. This follows the prior week’s outflow of $546 million. Despite the recent outflows, we are continuing to see strength in high yield funds as those funds had inflows of about $206 million.

Munis sold off this past week as the anticipated market correction may have finally started ahead of the summer re-investment period. Since Monday, the front end of the muni curve has risen an average of about 18 basis points and the belly of the curve has been impacted the most with yields rising roughly 21 basis points while the long-end of the curve has only risen by an average of about 6 basis points. With the sell off this past week, we did see 10-year notes hit their 2024 year high and the first time since November have we seen AAA yields above 3%. Due to the market correction we are currently experiencing, the muni-to-Treasury 10 year ratio has risen by 6.4 percentage points to 67.04%. Although there is strong sell off in munis which has helped ratios rise, we are still rich compared to the averages we are used to seeing. One of the main reasons for this current sell-off is due to over-supply as issuers rush to issue ahead of the election in November.

Municipal Supply: With just four trading this week due to the Memorial Day holiday on Monday, the negotiated calendar will have an expected volume of about $4.3 billion for the week. The largest deals of the week will be the $369 million Massachusetts Educational Finance Authority issuance, followed by the University of Cincinnati which will issue roughly $313 million, and the City of St. Louis, Missouri will be issuing Airport Revenue Bonds to the tune of $286.6 million for the St. Louis Lambert International Airport. Additionally, the San Francisco Community College District is scheduled to issue $270 million in General Obligation Bonds.