Municipal New Issuance: Last week, the negotiated calendar totaled to just over $7.3 billion with the largest deals of the week being the $1.5 billion New York City Transitional Finance Authority Future Tax Secured Tax-Exempt Subordinate Bonds issuance which AmeriVet participated in the Selling-Group. The next largest deal of the week was the $631 million Regents Board of Texas University. The Massachusetts Development Finance Agency issued $372 million in Revenue Bonds for Boston College.

Municipal Secondary Trading: Secondary trading for the week totaled to approximately $41.9 billion with 53% of all secondary trading being dealer sells with the bulk of the volume of secondary trading being executed on Monday. According to Bloomberg, clients put roughly $6.46 billion up for the bid, down slightly from the prior week’s bids-wanted volume of $6.58 billion.

Municipal Spreads: After a couple of weeks of rising yields, muni yields this past week fell slightly with 10-year yields decreasing by 1.1 basis points to end the week at 3.07%. Munis did underperform Treasuries this past week as the 10- year muni-to-Treasury ratio is now yielding 72.36%, compared to the prior week when the 10-year ratio was yielding 71.55%. We did see the muni curve steepen this past week by 2.5 basis points to 156 basis points.

According to the LSEG Lipper Global US Funds Flow data, muni bond funds saw an outflow of $216 million from their funds as investors continue to pull their investments due to higher yields as well as selling during tax season. We did see high yield funds add about $316 million this past week.

Muni yields remained unchanged this week which was a welcome relief for investors as for during the month of March, we have seen yields rise an average of 20 basis points across the curve with the front end rising by 8 basis points, the belly of the curve by 17 basis points, and the long end by over 26 basis points. With yields unchanged for the week, month-to-date returns stand at -1.13%, moving muni year-to-date returns to .35%. With yields unchanged this week, munis continue to cheapen compared to Treasuries as we saw 10-year and 30-year munis ratios hit their cheapest levels in over a year with the 10-year ratio hitting its highest on Wednesday at 73.25%, and the 30-year ratio hitting its highest on Wednesday as well at 92.77%. This is the first time since November of 2023 in which we have seen the 10-year ratio at about 73%, as well as the first time we have seen the 30-year ratio above 92%. With yields at their highest and ratios at the cheapest, the value investors should be looking into are longer dated bonds.

Municipal Supply: This week, the negotiated calendar will have an expected volume of approximately $6.75 billion with three deals covering about half of the issuance for the week. The largest deals of the week will be the $1.53 billion Department of Airports of the City of Los Angeles – Los Angeles International Airport Subordinate Revenue and Refunding Revenue Bonds issuance, the $1.1 billion Public Finance Authority for the Salina Economic Development Authority’s American Tire Works Project. The New York City Municipal Water Finance Authority will issue $603 million in Water and Sewer System Second General Resolution Revenue Bonds. Notably, AmeriVet will be participating in the Selling-Group for this transaction.