AmeriVet Weekly Muni Snapshot

Municipal New Issuance: For the second week of December, the negotiated calendar had a total volume of just over $9.8 billion. The largest deal of the week was the $2.2 billion Regents of the University of California General Revenue Bonds issuance which AmeriVet participated in the Selling-Group. The next largest deal of the week was the City of Chicago – Chicago O’Hare Airport issuance which sold $954 million. The Texas Municipal Gas Acquisition and Supply Corporation issued $850 million of Gas Supply Revenue Bonds. AmeriVet was also participated in the Selling-Group for the New York City Housing Development Corporation’s Multi-Family Housing Revenue Bonds transaction which issued $536 million in tax-exempt bonds and $200 million in taxable bonds. AmeriVet was also in the Selling-Group for the $28 million New Hampshire Housing Finance Authority Multi-Family Housing Revenue Bonds

Municipal Secondary Trading: Secondary trading volume totaled to approximately $44.71 billion with 52% of secondary trading being dealer sells. According to Bloomberg {MBWDPAR Index}, clients put roughly $5.81 billion up for the bid, an increase from the prior week’s number of $5 billion.

Municipal Spreads: This past week, munis yields were relatively unchanged for the week with 10-year notes falling by a half of a basis point to 2.74%. With yields being unchanged for the week, munis were still able to outperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 65.12%, compared to the previous week when the ratio was at 66.44%. The muni curve did steepen over the past week by 3.5 basis points to end the week at 172 basis points.

Investors added only $16 million to muni bond funds this past week which follows the prior week’s inflow of $736 million.

As expected, the Fed cut rates by 25 basis points this past week as munis were steady on the news as most had already priced in the cuts. Prior to the Fed announcement, munis were unchanged from the 2026-2040 maturties and the 2041-2055 maturities saw a cut of one basis point. After the announcement, munis were unchanged with 2037-2040 maturities seeing just a one basis point bump. Muni returns continue to be relatively quiet for December as month-to-date returns now at -.16% pushing year-to-date returns to just under 4%. The 1-4 year range continues to see the most gains this month with returns of .15% while the long end sees the largest losses of .56%.

Municipal Supply: The negotiated calendar for this week will have an expected volume of $5.75 billion with the largest deals of the week being the New York City Transitional Finance Authority which will issue $1.8 billion in tax-exempt bonds and $167 million in taxable bonds. Notably, AmeriVet will be participating in the Selling-Group for the NYCTFA. The second largest deal of this week will be The Ohio State University’s $562 million General Receipts Refunding Bonds issue. The North Carolina Medical Care Commission plans on issuing $313 million for the Deerfield Episcopal Retirement Community Project. AmeriVet will also be in the Selling-Group for the New York City Housing Development Corporation which plans on issuing $181 million in taxable bonds and $37.1 million in tax-exempt bonds. This week should be the last significant week of issuance as issuers close out the year before Christmas next week followed by the New Years holiday the following week.

Have a great week!