Municipal New Issuance: This past week the negotiated calendar totaled to just over $12 billion with the largest deal of the week being the $1.6 billion Triborough Bridge and Tunnels issuance which AmeriVet participated in the Selling-Group. Interestingly, the Triborough Bridge and Tunnel Authority deal saw robust demand as the deal was upsized from $1.3 billion to $1.6 billion and this was the first time the TBTA issued Real Estate Transfer Tax Revenue Bonds. The City and County of San Francisco Airport Commission issued $989 million with $883 million being AMT bonds. The Central Valley Energy Authority issued roughly $984 million.

Municipal Secondary Trading: Secondary trading for the week totaled to over $51.1 billion with 51% of all secondary trades being dealer sells. Last week, clients bids-wanted were elevated as according to Bloomberg data, clients put up roughly $6.88 billion up for the bid which was an increase from the prior weeks total of $4.08 billion.

Municipal Spreads: Muni yields rallied this past week with yields falling an average of 4.3 basis points across the curve with yields on 10-year notes falling by 4.4 basis points to 3.19%. Although munis rallied this past week, they did underperform versus Treasuries as the 10-year muni-to-Treasury ratio is now yielding 69.12% compared to 67.98% from the prior week. With the rally in munis, we did see a slight steepening in the yield curve with the curve steepening by 0.37 basis points to 121 basis points.

According the LSEG Lipper US Fund Flows data, outflows returned this past week as investors pulled approximately $251 million from muni bond funds. This follows the prior week’s inflow of $841 million. We did see inflows in high yield funds to the sum of $244 million.

As we pass the halfway point of January, munis are in the red to start the year with munis being down .31%. With munis underperforming to start the month, munis have continued to cheapen over the past three weeks as Treasury returns are about flat for the year while munis are down .31%. This has pushed ratios higher with ratios in the 2–10-year maturities moving higher by 1 to 1.50 percentage points and the 30-year maturity ratio moving higher by 3 percentage points. This is positive news for investors interested in the long end of curve as the 30-year ratio reached a high of 90.48% for 2024 in September to a low of 78.43% within 90 days.

Municipal Supply: The negotiated calendar for the week will have an expected volume of just over $6.86 billion with the largest deal of the week being the $2 billion General Revenue Refunding Bonds being issued by The Regents of the University of California. The Idaho Health Facilities Authority for the St. Luke’s Health System Project will be issuing $572 million in Revenue Bonds. AmeriVet will be participating in two issues this week as a Selling-Group-Member, the first being the $541 million Massachusetts Clean Water Trust State Revolving Fund Bonds issuance. AmeriVet will also being participating in the Selling-Group for the Connecticut Housing Finance Authority’s Housing Mortgage Finance Program Bonds issuance which will issue $200 million in taxable bonds and $100 million in tax-exempt bonds.