Municipal New Issuance: This past week, the negotiated calendar issued just over $7.1 billion, with the largest deal of the week being the $1.39 billion New York City Transitional Finance Authority’s Building Aid Revenue Bonds issuance, which AmeriVet participated in as a Selling Group Member. AmeriVet also served as a Co-Manager for the second largest deal of the week: the Los Angeles County Public Works Financing Authority, which issued $824 million in Lease Revenue Bonds, 2025 Series J. The Louisiana State Gas and Fuel Tax Revenue issued $387 million.

Municipal Secondary Trading: Secondary trading volume totaled just over $45.60 billion, with 53% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $5.51 billion up for the bid, slightly down from the prior week’s number of $5.88 billion.   

Municipal Spreads: Munis yields this past week rose by an average of 2.1 basis points across the curve, with yields on 10-year notes rising by 3.4 basis points to end the week at 3.22%. With yields rising this past week, munis did underperform, with the 10-year muni-to-Treasury ratio being 75.71%, compared to 73.76% from the prior week. With muni yields rising, the muni curve did steepen this past week by 5.5 basis points to 243 basis points.

According to LSEG Lipper Global U.S. Fund Flows data, investors added roughly $2.3 billion to muni bond mutual funds this past week. This was the largest inflow to muni bond funds since January 2023. This follows the prior week’s outflow of $108 million.

With yields rising over the past week, returns for August are now at .61%, which brings year-to-date returns to .06%. With just one week left in the month coupled with a light calendar, secondary trading should be the main driver for rates this week, as most issuers will take a pause for the rest of the summer, returning after the Labor Day holiday. This should give a slight boost to muni returns as investors look to take advantage of higher yields before the expected rate cuts in September.

Municipal Supply: The negotiated calendar for this week will have an expected volume of $4.7 billion, with the largest deal of the week being the $929 million San Francisco Bay Area Rapid Transit District General Obligation Bonds issue. The second largest deal of the week will be the Pennsylvania Turnpike Commission’s $599 million Turnpike Revenue Bonds issuance, and the third largest deal of the week will be the $301 million Arizona Board of Regents for the Arizona State University’s System Revenue Bonds. The Washington State Housing Finance Commission plans on issuing $262 million in Municipal Certificates.

Have a great week!