Municipal New Issuance: Last week, the negotiated calendar had a total volume of just over $11.65 billion with the two largest deals of the week being the $980 million Dormitory Authority of the State of New York, followed by the Harris County Hospital District which issued approximately $808 million. AmeriVet participated in three issues this past week as a Selling Group Member for the New York City Transitional Finance Authority which issued $1.1 billion in tax-exempt bonds and $340 million in taxable bonds, the $178 million South Carolina State Housing Finance and Development Authority, and the $44 million Maryland Community Development Administration.

Municipal Secondary Trading: Secondary trading volume totaled to just over $46.702 billion for the week with 54% of all secondary trading being dealer sells. According to Bloomberg, clients put just over $7.09 billion up for the bid this past week, which is an increase from the prior week’s total of $6.09 billion.

Municipal Spreads: Muni yields for the week remained relatively unchanged with yields rising by an average of about 1.8 basis points across the curve with yields on 10-year notes falling by just 1.4 basis points. Munis continue to outperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 74.50%, compared to 75.84% from the prior week, last month the ratio was at 80.25%, and at the start of the year the ratio was at 68.41%. The muni curve did steepen this past week by 3.9 basis points to end the week at 157 basis points.

For the third straight week, muni bond funds saw inflows according the LSEG Lipper Global US Fund Flows data as investors added approximately $769 million to muni bond funds. This follows the prior weeks inflow of $1.1 billion.

As we pass the halfway mark of the month, returns for munis stand at .28% with year-to-date returns at -.75%, compared to last year where we saw returns for month of 1.02% at the midway point of the month. Although we are still behind last year’s returns for the month, we are still in a better position than we were back in April of this year where we saw a dramatic sell off in the first half of the month due to tariffs initiated by the current administration as well as investors selling ahead of Tax Day, and the possibility of removal of tax-exemption in munis where returns were in the red at 1.74% before settling down at -.81%. Since then, we have seen munis rebound as the threat of the removal of the municipal tax exemption was over blown to which investors took advantage of higher yields as well as cheaper valuations in munis relative to Treasuries. Currently, 10-year munis are yielding around 74.50% of Treasuries, compared to a high of about 88% back on April 9^th. Even though we are richer by about 13 percentage points since then, we are still at cheaper valuations from the start of the year when the ratio was at 68.41% and cheaper than the 2-year average of 67.16%. With the supply for the summer expected to dip, we should continue to see ratios richen in munis favor.

Municipal Supply: The negotiated calendar for the week will have an expected volume of approximately $9.35 billion with the largest deals of the week being the $1.3 billion Sutter Health Taxable Bonds issuance, the $730 million State of Kansas Department of Transportation Highway Revenue and Refunding Bonds issuance, and the New Jersey Educational Facilities Authority which will issue $705 million for Princeton University. Washington Health Care Facilities Authority plans to issue $641 million. AmeriVet will be participating as a Selling Group Member for the Maryland Community Development Administration’s $200 million Residential Revenue Bonds issuance consisting of $45 million in tax-exempt bonds and $155 million in taxable bonds and for the Florida Housing Finance Corporation’s $160 million Homeowner Mortgage Revenue Bonds issuance which will also consist of $130 million in tax-exempt bonds and $30 million of taxable bonds.

Have a great week!