Municipal New Issuance: Last week, the negotiated calendar had a total volume of just over $8.57 billion with the largest deal being the $729 million State of Kansas Highway Revenue and Refunding Bonds issuance for their Department of Transportation. The second largest deal was the $594 million New Jersey Educational Facilities Authority for Princeton University. The City of Boston issued $464 million. AmeriVet participated as a Selling Group Member in one issue this past week for the Florida Housing Finance Corporation which issued Homeowner Mortgage Revenue Bonds, consisting of $140 million in tax-exempt bonds and $30 million in taxable bonds.

Municipal Secondary Trading: Secondary trading volume totaled to just over $40.62 billion for the week with 55% of all secondary trading being dealer sells. According to Bloomberg, clients put just over $6.57 billion up for the bid last week, which is a decrease of $520 million from the prior week’s total of $7.09 billion.

Municipal Spreads: Muni yields for the week rose by an average of 6 basis points with yields on 10-year notes rising by 5.8 basis points to end the week at 3.36. With yields rising over the past week, munis were still able to outperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 74.58%, compared to 73.84% from the prior week. We continue to see the muni curve steepen as the curve steepened by 12.6 basis points to 169 basis points, one month ago the curve was at 157 basis points.

For the fourth straight week muni bond funds saw inflows according the LSEG Lipper Global US Fund Flows data as investors added approximately $768 million to muni bond funds. This follows the prior week’s inflows of $769 million.

Munis were weaker overall this past week as returns for the month move into the red at -.22% for the month, pushing munis further into the red at -1.24% for the year. Despite the weakness this past week, we are still better position then we were back in April when tariffs were put in place and when rumors began to spread from Capital Hill in Washington of the potential elimination of the tax exempt status of munis. Since we rallied from our lows back on April 9^th, investors have taken advantage of higher yields as well as the relative cheapness compared to Treasuries as the 10-year ratio has shown munis outperforming Treasuries by roughly 13.56 percentage points since April 9^th. Even as we are seeing munis richen compared to Treasuries since then, munis are still cheaper overall versus Treasuries since the start of the year when the ratio was at 68.41% and are still off from their highest levels back in March 2024.

Municipal Supply: With the holiday shortened week due Memorial Day yesterday, the negotiated calendar will have an expected volume of just over $4 billion with the largest deals of the week being the $1.75 billion New Jersey Turnpike Authority which will issue Turnpike Revenue Bonds. The Omaha Public Power District plans on selling $503 million in Electric System Revenue Bonds. AmeriVet will participate as a Selling Group Member on one issue this week for the Connecticut Housing Finance Authority which plans on selling $270 million of Housing Mortgage Finance Program Bonds (Social), consisting of $250 million in taxable bonds and $20 million in tax-exempt bonds.

Have a great week!