Municipal New Issuance: Last week’s negotiated calendar totaled just over $6 billion with the largest deal of the week being the $1.6 billion Los Angeles Department of Airports issue. The second largest deal of last week, which AmeriVet participated in the Selling-Group, was the $559 million New York City Municipal Water Finance Authority Water and Sewer System Second General Resolution Revenue Bonds issuance. The Texas A&M University issued $379 million and was the third largest issuance.

Municipal Secondary Trading: Secondary trading for the week totaled to approximately $43.38 billion with 53% of all secondary trading being dealer sells, and the bulk of secondary trading volume being executed on Thursday. According to Bloomberg, clients put roughly $7.25 billion up for the bid, an increase from the prior week’s bids-wanted volume of $6.46 billion.

Municipal Spreads: Muni yields rose this past week as yields climbed by an average of 14 basis points across the curve with yields rising the most in the belly of the curve. 10-year yields rose by 17.3 basis points this past week to end the week at 3.25%. Munis continue to underperform Treasuries as the 10-year muni-to Treasury ratio is now yielding 76.44% compared to 72.41% the previous week. Notably, at the start of the year, the 10-year ratio was at 68.41%. With yields rising over the past week, we did see the muni curve steepen by 4.7 basis points to 161 basis points.

Once again, we saw muni bond funds experiencing outflows as LSEG Lipper Global US Fund Flows data indicates outflows of $573 million from muni bond funds. This follows the prior week’s outflow of $216 million, and marks the third week in a row of outflows.

Munis continued their selloff this past week as concerns regarding tax-exemptions continue to mount, coupled with elevated issuance and investors selling due to tax season, these circumstances have compounded to add even more pressure to an already volatile tax-exempt market. With as much as 18 basis points cuts across the curve, March returns dipped further into the red with returns of -2.02% which brings muni year-to-date returns to -.55%. With the March sell off, munis continue to cheapen compared to Treasuries as ratios are at the cheapest they have been since November 2023 with the 5-year ratio passing 73%, 10-year ratio passing 76%, and the 30-year ratio passing 93% for the first time in the same time frame.

Municipal Supply: This week, the negotiated calendar will have an expected volume of approximately $8.3 billion with the largest deal being the $2.6 billion State of California General Obligations Bonds sale which AmeriVet will be participating in the Selling-Group. The next largest deal of the week will be the $729 million Illinois Finance Authority for the State of Illinois Clean Water Initiative Revolving Fund Revenue/Refunding Bonds issuance which will feature a Green Bonds designation. AmeriVet will also be participating as a Selling-Group-Member today for the $21 million Community Development Administration (Maryland Department of Housing and Community Development) Housing Revenue Bonds issuance which are featuring a Sustainability Bonds designation.