Municipal New Issuance:  This past week, the negotiated calendar had a total issuance of just over $8.12 billion, with the largest deals of the week being the $1.1 billion Department of Water and Power of the City of Los Angeles Power System Revenue Bonds issuance, followed by the $960 million California Community Choice Financing Authority Clean Energy Project Revenue Bonds transaction. This past week, AmeriVet participated as a Selling Group Member for $216 million New Mexico Finance Authority Subordinate Lien Public Project Revolving Fund Revenue Bonds transaction. AmeriVet also served as a Co-Managing Underwriter for the Wisconsin Housing and Economic Development Authority’s Housing Revenue Bonds transaction. Currently, muni borrowers have issued approximately $426 billion year-to-date which is about 15% higher than last years volume.

Municipal Secondary Trading: Secondary trading volume totaled to approximately $42.89 billion, with 54% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $5.24 billion up for the bid, a decrease from the prior week’s total of $5.83 billion.

Municipal Spreads: This past week, munis yields fell by an average of 2.3 basis points with the front end seeing a 1-2 basis points cut, and the rest of the curve seeing a 2-4 basis point bump. Yields on 10-year notes saw a cut of 2.6 basis points to end the week at 2.90%. Although yields are lower this week, munis did underperform Treasuries last week with the 10-year muni-to-Treasury ratio now yielding 70.38% compared to 70.06% from the prior week. We did see the yield curve flatten this past week by 5.8 basis point to 199 basis points.

According to LSEG Lipper Global U.S. Fund Flows data, investors added approximately $1.1 billion to muni bond funds last week. This follows the prior weeks outflow of $28.9 million.

Since August, the long end has been the main driver of muni returns as we have seen the muni curve flatten by 30 basis points from 229 basis points to 199 basis points since August 1^st as investors continued to take advantage of higher yields before the Fed made any cuts later this year. According to LSEG data, long term funds have seen roughly $5.2 billion in inflows since the first week of August while intermediate funds have only seen an inflow of $2.17 billion. The front end of the curve is doing most of the heavy lifting for the muni market as investors were in a holding pattern as most of the market was anticipating economic data that would indicate to a Fed rate cut. Once the economic data pointed to a rate cut, the long end rallied by about 38 basis points while the front end remained relatively flat from September 2^nd to October 3^rd.

Municipal Supply: Supply for the week will have an expected volume of just over $10.46 billion with the largest deals of the week being the Texas Transportation Finance Corporation’s $1.7 billion Subordinate Tier Toll Revenue and Refunding Bonds transaction. The City of New York plans on issuing $1.5 billion in General Obligation bonds. PeaceHealth Obligated Group will issue $787 million in taxable bonds as well. AmeriVet will be participating in two deals as a Selling Group Member this week for the $195 million South Carolina State Housing Finance Development Authority’s Mortgage Revenue Bonds transaction and the Minnesota Housing Finance Agency’s $50 million State Appropriation Bonds (Housing Infrastructure) transaction.

Have a great week!