AmeriVet Weekly Muni Snapshot

Municipal New Issuance: The negotiated calendar for the second week of January totaled to just over $9.5 billion, with the largest deal of the week being $1.5 billion in Future Tax Secured Subordinate Bonds for Fiscal 2026 from New York City Transitional Finance Authority, which AmeriVet participated in as a Selling Group Member. The next largest deal of the week was the $900 million issuance from California Community Choice Finance Authority. AmeriVet served the Wisconsin Housing and Economic Development Authority as a Co-Managing Underwriter for their Home Ownership Revenue Bonds issuance consisting of $100 million in tax-exempt bonds and $60 million in taxable bonds.

Municipal Secondary Trading: Secondary trading volume totaled to approximately $4.43 billion, with 52% of secondary trading being dealer sells. According to Bloomberg (MBWDPAR Index), clients put roughly $5.61 billion up for the bid, which is up from the prior week’s number of $4.48 billion.

Municipal Spreads: This past week, the municipal market saw yields fall by an average of 2.3 basis points, with yields on 10-year notes falling by 2.6 basis points to end the week at 2.58%. With yields falling, munis did outperform Treasuries with the 10-year muni-to-Treasury ratio now yielding 61.23%, compared to 62.72% from the prior week. We did see muni curve steepen this past week by 5.8 basis points to 187 basis points.

According to LSEG Lipper Global U.S. Fund Flows data, investors added roughly $1.8 billion to muni bonds funds over the past week. This follows the prior week’s inflow of $1.5 billion.

Munis continued their strong start to the year as just 2 weeks into the new year, munis have returned .93%. When compared to last year, munis were down .67% at the same point in time. This past week, the front end experienced the strongest gains, with bumps of 5-6 basis points in the 1-2 year maturities, pushing returns for the month to .42%. The 3-year range did see a 4 basis point bump, pushing returns to .62%. Long end yields were flat for the week, which pushed returns for the month slightly higher to .78%. With the recent inflation numbers showing that we are still above our inflation target, we should expect to see a pause in rate cuts and we shouldn’t expect too much change with munis as we are currently priced into a pause. However, AmeriVet currently anticipates that the Fed will cut rates later this year.

Municipal Supply: The negotiated calendar for the week has an expected total volume of $7.45 billion, with the largest deal of the week being the $800 million Water and Sewer System Second General Resolution Revenue Bonds being issued by the New York City Municipal Water Finance Authority, which AmeriVet will participate in as a Selling Group Member. The next largest deal of the week will be the $734 million MedStar Health Issue from Maryland Health and Higher Education Facilities Authority. The Massachusetts Development Finance Agency plans on issuing $720 million in Revenue Bonds. AmeriVet will also participate in two transactions as a Selling Group Member this week: the New York City Housing Development Corporation’s Multi-Family Housing Revenue Bonds, which plans on issuing $197 million and $152 million in two separate transactions and the Massachusetts Clean Water Trust’s $705 million State Revolving Fund (SRF) bonds issuance.

Have a great week!