Municipal New Issuance: This past week, the negotiated calendar issued just over $11.5 billion, with the largest deals of the week being the $985 million Florida Development Corp issue for the Brightline Passenger Rail. The next largest deal of the week was the New York & New Jersey Port Authority which issued $962 million. The Long Island Power Authority issued $900 million. AmeriVet served the New York City Health and Hospital $242 million Health System Bonds 2025 Series A issuance as a Co-Manager. AmeriVet also served as a Co-Manager for the Massachusetts Housing Finance Agency Single Family Housing Revenue Bonds issuance, which included $78 million in taxable bonds and $64 million in tax-exempt bonds. Additionally, AmeriVet participated as a selling group member in the $26 million Connecticut Housing Finance Authority Housing Revenue Bonds Series 2025 C issuance.

Municipal Secondary Trading:  Secondary trading volume totaled just over $44.66 billion, with 55% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $5.88 billion up for the bid, down from the prior week’s number of $6.18 billion.  

Municipal Spreads: Munis this week were relatively unchanged for the week with an average cut of 1.2 basis points across the curve. We did see 10-year notes experience a cut of 1.5 basis points to end the week at 3.18%. With munis being relatively unchanged for the week, munis did outperform Treasuries with the 10-year muni-to-Treasury ratio now yielding 73.76%, compared to 74.02% from the prior week. We did see the muni curve steeping by 4.8 basis points to 238 basis points.  

According to LSEG Lipper Global U.S. Fund Flows data, investors pulled roughly $108 million from muni bond mutual funds this past week. This follows the prior week’s inflow of $1.7 billion and concludes three straight weeks of inflows.

Munis were relatively unchanged over the past week, as Treasury yield rose due to PPI surging higher, lowering the chances of a Fed rate cut, and all but eliminating a 50 basis points cut in September. With munis unchanged for the week, August returns are at .60%, which brings us back into positive territory for the year with returns of .05%. With just two weeks left in the month, and an expected light calendar for the rest of the month, we could expect to see lower yields and a positive return for August. Year-to-date returns could dip back in to the red in September as we wait for a possible rate cut. If unfavorable economic numbers (employment, CPI, PPI) are released next month, we should expect a hold on any rate cuts and a possible rate hike to follow, putting a damper on any positive returns for the rest of the year.

Municipal Supply: The negotiated calendar for this week will have an expected volume of $6.7, billion with the largest deal of the week being the $1.38 billion New York City Transitional Finance Authority. Next, AmeriVet is proud to be serving the $826 million Los Angeles County Public Works Financing Authority, Lease Revenue Bonds 2025 Series J issuance as a Co-Manager. The State of Louisiana will be issuing $390 million for their Gasoline and Fuel Tax Revenue Refunding Bonds, 2025 Series B.

Have a great week!