Municipal New Issuance: For the first week of February, the negotiated calendar had a total volume of just over $8.1 billion, with the largest deal of the week being the $763 million Central Valley Energy Authority. The Chicago Transit Authority issued $504 million. The Port Authority of New York & New Jersey issued $350 million. This past week, AmeriVet participated in the Selling-Group for the Minnesota Housing Finance Agency’s $87 million Residential Housing Finance Bonds issuance.

Municipal Secondary Trading: Secondary trading volume totaled to approximately $44.86 billion, with 54% of secondary trading being dealer sells. According to Bloomberg (MBWDPAR Index), clients put roughly $5.55 billion up for the bid, which is an increase from the prior week’s total of $4.03 billion.

Municipal Spreads: The first week of February saw yields fall by about 3.2 basis points across the curve with yields on 10-year notes falling by 3.1 basis points to end the week at 2.59%. With yields falling this past week, munis did outperform Treasuries with the 10-year muni-to-Treasury ratio now yielding 61.64% compared to 61.90% from the prior week. We did see the muni curve steepen by 8 basis points to close out the week at 207 basis points.

According to LSEG Lipper Global U.S. Fund Flows data, investors added roughly $2.4 billion to muni bonds funds over the past week. This follows the prior week’s inflow of $2 billion as we continue to see money flow into muni bond funds.

Munis continued their strong start this past week as year-to-date returns have risen to 1.24%. With yields falling this past week, munis started February strong with returns of .30% with the 6-12 maturity range seeing the largest gains for the month with returns of .39%, while the 1-2 maturity range saw the smallest gains of just .13%.

Munis continue to outperform Treasuries this year as demand continue to outpace supply pushing munis to outperform Treasuries. 2-year munis have the largest outperformance when compared to Treasuries as the munis-to-treasury ratio at the start of the year was at 70.27% and is now yielding 60.73 %. The 5-year ratio fell from 64.20% to 58.10% while the 10 year ratio ratio fell from 65.43% to now 61.64%. The 30-year ratio is the only portion of the curve that ratio be relatively flat with the ratio at the start of the year being 86.52% and is now at 86.67%.

Municipal Supply: For the first second week of February, the negotiated calendar will have an expected volume of $8.2 billion with the largest deals of the week being the $1.25 billion Harris County Cultural Education Facilities Finance Corporation Revenue Refunding Bonds issue, followed by the District of Columbia’s $929 million issue GO & GO Refunding transaction. AmeriVet will be serving as a Co-Manager for the $522 million State of California Department of Water Resources Central Valley Project Water System Revenue Bonds issuance. AmeriVet will also be participating in the Selling-Group for the $7 million Community Development Administration Multi-Family Development Revenue Bonds issuance.

Have a great week!