AmeriVet Weekly Muni Snapshot

Municipal New Issuance: With the Thanksgiving Holiday this past week, the negotiated calendar totaled to just over $2.24 billion for the week with the largest deals of the week being the Indiana Finance Authority which issued $525 million in three separate issues. The next largest deal of the week was the $253 million Pennsylvania Housing Finance Agency. November issuance for the month totaled to just over $37 billion which is up 45% year-over-year.

Municipal Secondary Trading: Secondary trading volume totaled to approximately $23.45 billion with 56% of secondary trading being dealer sells. According to Bloomberg {MBWDPAR Index}, clients put roughly $2.55 billion up for the bid, down from the prior week’s number of $5.91 billion due to the Thanksgiving Holiday.

Municipal Spreads: This past week, munis yields were unchanged with 10-year notes ending the week and month at 2.71%. At the start of the month, 10-year notes were at 2.71%. With munis remaining unchanged for the week, they did underperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 68.51% compared to 65.75%. At the start of the month the ratio was at 67.01%. The muni curve remains unchanged at 163 basis points for the week and for the month.

With munis being flat for the month, munis did underperform Treasuries across the curve as the 2-year ratio is now yielding 71.15% compared to 69.51% at the start of the month. The 5-year ratio is now yielding 67.50% compared to 65.02% at the start of the month. The 7-year ratio is yielding 66.89% today while at the start of the month it was at 64.67%. The 10-year ratio is yielding 68.51% today and was yielding 67.02% at the start of the month. The 30-year maturity performed the best out of the maturities as it only underperformed slightly this month by just .2 percentage points as the ratio is now yielding 88.49%.

As we head into the final month of the year, we should see a strong rally as December is typically a light calendar (fourth smallest) and should fuel a rally for secondary demand as investors look to tax loss swapping to wrap up for the year. The month of December typically sees a rally with just one negative performance in the last 10 years.

Municipal Supply: For the first week of December, the negotiated calendar will have an expected volume of just over $13.5 billion, with the largest deals of the week being the $1.5 billion State of Connecticut Special Tax Obligations Bonds issuance for Transportation Infrastructure Purposes which AmeriVet will be participating in the Selling-Group. The next largest deal of the week will be the $1 billion Utility Debt Securitization Authority. The Commonwealth of Massachusetts plans of issuing $1 billion. AmeriVet will be serving as a Co-Manager for the Massachusetts Housing Finance Agency’s Single-Family Housing Revenue Bonds transaction which plans on issuing $62.7 million in tax-exempt bonds and $34.3 million in taxable bonds.

Have a great week!