Municipal New Issuance: The first week of June had a total negotiated issuance of just over $12.43 billion for the week with the largest deal being the $823 million Metropolitan Washington Airports Authority Revenue and Refunding bonds issuance. The second largest deal last week was the $807 million Commonwealth of Massachusetts General Obligation and Refunding bonds issuance which AmeriVet participated in the Selling-Group. The deal saw significant demand as yields were bumped by four to eight basis points. AmeriVet served as a Co-Manager on two transactions this past week, the first being the State of Connecticut’s $450 million General Obligation bonds issuance consisting of $250 million in Taxable bonds and $200 million Tax-exempt bonds. AmeriVet was also served as a Co-Manager on the $252 million Massachusetts Housing Finance Agency Housing/Sustainability bonds transaction. In total, both the competitive and negotiated calendar new issuance last week totaled to over $16 billion, the largest since December 2021.

Municipal Secondary Trading: For the first week of June, secondary trading totaled to just over $43.5 billion for the week with 54% of secondary trades being dealer sells. According to Bloomberg, clients put up roughly $5.79 billion up for the bid which is up from the prior weeks client’s bids wanted total of $4.91 billion.

Municipal Spreads: For the first week of June, munis saw their yields fall for the first time in 3 weeks as 10-year notes fell by 17.6 basis points to 2.93%, pushing yields below 3% for the first time since May 23^rd. With yields falling, munis were able to outperform Treasuries this past week as the 10-year muni-to-Treasury ratio is now yielding 66.35%, compared to the prior week’s ratio of 69.02%. The muni curve saw some slight flattening with the curve flattening by just .09 basis points to 63 basis points.

According to LSEG Lipper Global Fund Flows data, for the first time in about a month, muni-bond funds saw a weekly inflows as investors added about $549 million with the bulk of the inflows coming from long-term funds. This follows last week’s outflow of $94.9 million.

After a dismal end to May with yields hitting their year-to-date highs, munis have rallied in the first week of June as yields across the curve fell by an average of approximately 16.7 basis points. This is some positive news for munis as the last two weeks of May saw yields rise by over 20 basis points across the curve with the belly of the curve seeing significant losses. In the first week of June returns are about 1.07%, bringing our year-to-date losses lower to -.86%. Although we had the largest issuance since Dec 2021 this past week, many would have thought this would have over-saturated the markets, but with the influx of cash from reinvestments brought some reassurance to the markets. With a small calendar this week and cash that still needs to be reinvested, we should expect to see the rally continue.

Municipal Supply: For the second week of June, we will have a light calendar with the negotiated calendar’s expected volume of just over $6 billion with the largest deals being the $700 million county of Los Angeles Tax and Revenue Anticipation Notes issue, followed by the $517 million New York City Housing Development Corporation Multi-Family Housing Revenue bonds issuance. The third largest deal of this week will be the Massachusetts Water Resource Authority’s $477 million General Revenue and Refunding bonds issuance. This week, AmeriVet will be participating in the Selling-Group for the $80 million Minnesota Housing Finance Agency Residential Housing Finance bonds issuance.