Municipal New Issuance: For the final week of February, the negotiated calendar had a total volume of just over $7.35 billion with the largest deals of the week being the $950 million New York City Water Finance Authority which was upsized from the original size of $600 million which AmeriVet participated in the Selling-Group. The next largest deal of the week was the $542 million South Carolina Public Service Authority. Issuance for the year is up roughly 17% from a year ago as issuer’s continue to come to the municipal market even as the muni landscape changes.

Municipal Secondary Trading: Secondary trading for the week totaled to over $37.51 billion with 52% of all secondary trading being dealer sells and the bulk of the volume of secondary trading being executed on Tuesday. According to Bloomberg, clients put roughly $4.97 billion up for the bid, down from the prior week’s bids-wanted volume of $4.35 billion.

Municipal Spreads: For the last week of February, muni yields fell by an average of 7.8 basis points across the curve with yields on 10-year notes falling by 9.7 basis points to end the week at 2.87%. Although we did see muni rally this past week, they did underperform versus Treasuries as the 10-year muni-to-Treasury ratio is now yielding 68.36%, compared to the prior week when the ratio was yielding 67.12%, and at the start of the month when the ratio was at 67.12%. We did see the muni curve steepen this past week by 1.6 basis points to end the month at 135 basis points.

According to LSEG Lipper US Fund Flows data, muni bond funds added approximately $785 million over the past week which marks the sixth consecutive week on inflows and follows the prior week’s inflows of $546 million. February saw about $2.67 billion of inflows, bringing this year’s total inflows of about $5.6 billion.

February was a positive month for munis as month-to-date returns totaled to a gain of .99%, adding onto January’s rally to push year-to-date returns to 1.50%. February saw muni yields in the front end of the curve fall about 15 basis points with returns of .67%, the belly of the curve seeing a 16 basis point drop in yields with returns of around 1%, while the long end saw yields fall by about 4 basis points with gains of about .98%.

March will be an interesting month as we are only expected to see about $30 billion in principal and interest payments for the month as many investors tend to sell in March to pay taxes in April. These factors could put some pressure on the muni markets as March tends to be a lackluster month historically for returns with only 2 positive returns for the month of March.

Municipal Supply: For the first week of March, the negotiated calendar will have an expected volume of approximately $9 billion with the largest deals of the week being the $1.4 billion City of New York General Obligation issuance that will also issue $68 million in remarketing bonds. It is important to note that AmeriVet will be participating in the Selling-Group for both issues. The Regents of The University of California will issue $1.2 billion and the Commonwealth of Kentucky State Property and Building Commission will be issuing $829 million.