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AmeriVet Weekly Muni Snapshot

Municipal New IssuanceLast week’s negotiated calendar totaled to just over $8 billion with the largest deal of the week being the $2.5 billion New York State Transportation Development Corporation for the JFK International Airport New Terminal One Project which saw strong demand as the deal was upsized from $1.5 billion and saw yields bumped by as much as 10 basis points. The second largest deal of the week was the Public Energy Authority of Kentucky which issued $1.1 billion in Gas Supply Revenue Refunding Bonds. AmeriVet was in one issue this week which was the $42 million Maryland Department of Housing and Community Development Housing Revenue Bonds Series 2024 B & C.

Municipal Secondary Trading: For the third week of June, secondary trading totaled to just over $30.57 billion for the week with 54% of secondary trades being dealer sells. According to Bloomberg, clients put up roughly $5.04 billion up for the bid which is an increase from the prior week’s client’s bids wanted total of $6.13 billion.

Municipal Spreads: Munis remained unchanged for the week with 10-year notes yielding 2.81%. Although munis were unchanged for the week, they were still able to outperform Treasuries once again this week as the 10-year muni-to-Treasury ratio is now yielding 66.22% compared to 66.77% a week ago. Just one month ago, the 10-year ratio as at 63.27%. We did see the muni curve steepen this past week by .9 basis points to 66 basis points.

According to LSEG Lipper Global Fund Flows data, muni bond funds saw investors add to their funds to the sum of $16 million. This marks the third consecutive week of inflows with the majority of the inflows being in long-end funds as well as high yield funds. This follows the prior weeks inflow of $154 million and we should continue to see muni funds see inflows as investors are locking in higher yields ahead of any rate cuts.

Munis continue to recover this month after a dismal end to the month of May. Munis have recovered roughly 27-33 basis points this month, pushing month-to-date returns to 1.76% and pushing our year-to-date loses closer back into the green as we are currently down just .18% for the year. With just one week left in June and July usually being a slow month for municipal issuance, we should expect to see  demand for reinvestments to continue as we anticipate yields to fall as we wait for any rate cuts coming later this year. With yields falling, we also could start to see a surge in municipal issuance later this year.

Municipal Supply: For the final week of June, the negotiated calendar will have an expected volume of $ 6.6 billion with the largest deals of the week being the $1.5 billion City of Los Angeles 2024 Tax and Revenue Anticipation Notes (TRANs) issuance followed the by the $800 million Triborough Bridge and Tunnel Authority Payroll Mobility Tax Senior Lien Refunding Green Bonds Series 2024C issuance. The State of Kansas Department of Transportation will be issuing $699 million. AmeriVet will be in one issue this week which will be the $75 million New Hampshire Housing and Finance Authority Single Family Mortgage Acquisition Revenue Bonds issuance as a Selling-Group-Member.