Municipal New Issuance: For the third week of February, the negotiated calendar volume was just over $6.9 billion for the week. The largest deal of the week, being the Brightline West Passenger Rail Project issued $2.5 billion, in conjunction with the California Infrastructure and Economic bank which issued $2 billion, and the Nevada State Department of Business which issued $500 million featuring a 9.5% coupon which garnered strong interest as they were priced at a discount and were callable at a premium. With the strong demand the California tranche garnered, the deal saw a 4-basis point bump from the original pricing to the final pricing. Additionally, the Pennsylvania Economic Development Financing Authority issued $500 million in taxable bonds.

Municipal Secondary Trading: Secondary trading for the week totaled to over $32.35 billion with 55% of all secondary trading being dealer sells and the bulk of the volume of secondary trading being executed on Thursday. According to Bloomberg, clients put approximately $4.35 billion up for the bid, a decrease from the week previous to last week’s bids-wanted volume of $5.84 billion due to the President’s Day holiday last Monday.

Municipal Spreads: This past week, muni yields were relatively unchanged for the week with yields falling by an average of just 1.7 basis points with yields on 10-year notes falling by 3.3 basis points to end the week at 2.95%. Munis did outperform Treasuries this past week despite being relatively unchanged for the week with the muni-to-Treasury ratio now yielding 66.74%, compared to the prior week when the ratio was at 67.22%. We did see the muni curve flatten slightly by .2 basis points to end the week at 133 basis points.

According to the LSEG Lipper Global Funds Flow data, muni bond funds added roughly $546 million over the past week which marks the fifth consecutive week of inflows and follows the prior week’s inflows of $239 million. We did see high yield funds add approximately $184 million, compared to the previous week’s inflow of $313 million.

Munis overall this past week were steady as yields remained relatively unchanged with yields bumping slightly in the front end and remaining unchanged in the long end. With yields unchanged for the most part, munis returns for the month now stand at .38%, and year-to-date returns are now at .89%. With the continued volatility in the rates markets, munis continue to outperform Treasuries as the muni-to-Treasury continue to fall in the 2-10 range and have lowered by roughly .5% percentage points while ratios in the long end have dipped lower by .8 percentage points over the past week. With ratios continuing the skew further away from their normal averages, investors should look further out into the curve as the long end continues to be the most attractive as this is the cheapest part of the curve.

Municipal Supply: The negotiated calendar for the week will have an expected volume of about $6.54 billion with the largest deals of the week being the $650 million South Carolina Public Service Authority which will issue tax-exempt refunding bonds and taxable bonds, followed by the Pennsylvania Turnpike Commission which is expected to sell $602 million in Turnpike Revenue Bonds. The New York City Municipal Water Finance Authority plans to issue $600 million of Water and Sewer Second General Resolution Revenue Bonds. It is important to note that AmeriVet will be participating in the Selling-Group for this transaction.