Municipal New Issuance: Last week’s negotiated calendar totaled just over $3.5 billion as many issuers this past week pivoted to Day-to-Day status with taking their issuances to market as issuers took a pause due to market turmoil as the news of US Tariffs forced issuers to wait for more stability. The largest deals of the week were the $1.5 billion New York City GO which AmeriVet participated in the Selling-Group. AmeriVet served as a Co-Managing Underwriter for the State Public Works Board of the State of California which issued $603 million in tax-exempt bonds and $103 million in taxable bonds. One of the most notable issues to postpone this past week was the $500 million Port Authority of NY & NJ.

Municipal Secondary Trading: With the volatility in the markets last week, secondary trading totaled to over $67.8 billion with 52% of trades being dealer sells and Wednesday having the most volume for the week. This past week also saw a record amount of bids-wanted as clients sold off due to the market turmoil largely in part due to the tariff-induced turmoil. According to Bloomberg, clients put up approximately $12.93 billion up for the bid with Tuesday having over $3 billion in bids-wanted alone.

Municipal Spreads: This past week, munis had a volatile week with as yields rose by an average of about 83 basis points from Monday to Wednesday across the curve. Thursday alone, saw bumps across the curve by an average of 47 basis points after President Trump put a 90 day hold on tariffs and the release of favorable CPI data. All of the gains we saw were once again erased as the selloff continued on Friday with cuts of about 17-28 basis points. Overall, this past week muni yields did rise with 10-year notes rising by 63.5 basis points to 3.58%. At the start of the year, 10-year notes were at 3.12%. With muni yields rising over the past week, munis did underperform Treasuries as the 10-year muni-to-Treasuries ratio is now at 79.96% compared to the prior week when the ratio was at 73.85%. The muni curve remained unchanged at 157 basis points.

Investors pulled roughly $3.3 billion from muni bond funds last week according to LSEG Lipper Global US Fund Flows data. This follows the prior week’s outflow of $232 million and marks the fifth consecutive week of outflows. This outflow was the largest since June 2022 which also had similar volatile market conditions.

The tax-exempt markets had a tough week as yields hit their highest in decades on Wednesday before having one of the largest rallies on record on Thursday as the 90-day Tariff extension and the CPI data report helped fuel a rally. Friday saw munis selloff and erased any momentum as yields rose by as much as 28 basis points. This rollercoaster week caused many issuers to take a step back and postpone issuing until markets stabilize. With the selloff this past week, month-to-date returns moved back into negative territory with a negative return of .94% and year-to-date returns of -1.16%.

With higher yields, muni yields have become increasingly attractive as yields on 30-year notes hit their highest since 2011 at 4.85% on Wednesday, which also led to the 30-year muni-to-Treasury ratio surpassing 100% for the first time since December 2022, before settling down to 95.78. We saw similar movement in ratios across the curve with 5-year ratio surpassing 86% and the 10-year ratio surpassing 88%. Ratios have come down since then, however, they are still cheaper since the start of the year. The long end continues to be the most attractive part of the curve as 30-year notes are about 1.5 percentage points higher than 2-year munis and Treasuries are in the same range at 1.23 percentage points.

Municipal Supply: This week the negotiated calendar will have an expected volume of approximately $7.32 billion with the largest deal of the week being the $1.75 billion New York City GO taxable issuance which AmeriVet will be participating in the Selling-Group. The Department of Airports of the City of Los Angeles will issue $1.47 billion, mostly in Refunding bonds. The State of Oregon will be issuing $928 million in General Obligation bonds.