Municipal New Issuance: The negotiated calendar for the week totaled to just over $7.6 billion with the largest deals of last week being the $1 billion Nashville Educational Facilities Board deal for the Vanderbilt University Medical Center. The next largest deal of the week was the $908 million Los Angeles County Metropolitan Transportation Authority transaction. AmeriVet participated in the Selling-Group for the New York City Housing Development Corporation which issued $255 million in tax-exempt bonds and $28 million in taxable bonds.

Municipal Secondary Trading: Secondary trading volume for last week totaled to just over $43.33 billion, with 50% of secondary trading being dealer sells. According to Bloomberg (MBWDPAR Index), clients put just over $5.99 billion up for the bid which is an insrease from the prior week’s bids wanted total of $4 billion.

Municipal Spreads: Muni yields rallied for the second week in a row as yields fell by an average of 11.4 basis points across the curve. Yields on 10-year notes fell by 12.5 basis points to end the week at 2.91% and with yields falling, munis were able to outperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 67.36%, compared to the prior week when the ratio was at 69.83%. We did see the muni curve flatten this past week by 1.3 basis points to end the week at 206 basis points.

According to LSEG Lipper Global U.S. Fund Flows data, muni bond funds saw investors add to those funds this past week to the sum of $866 million. This follows prior week’s outflow of $923 million.

Munis yield moved lower across the curve, led by strength in the intermediate end of the curve as Treasuries declined and a rally in equities due to the temporary two-week ceasefire in the Iran war. Munis saw bumps across the curve with the 2027-2037 maturities seeing 10-12 basis point bumps, the 2038-2044 maturities seeing 12-13 basis points bumps, and the 2045-2056 maturities seeing 11 basis point bumps. Strong reinvestment demand as well as continued inflows into muni bond funds also played a key role by setting the conditions for the muni market to better absorb elevated new issue supply. Muni returns for the month are now at 1.14%, bringing total YTD returns to just under 1%.

With the rally this past week, munis did outperform Treasuries as we saw ratios dip lower across the curve as the benchmark AAA yield finished lower this week by 9-12 basis points with the 2-year ratio yielding 60.63%, the 5-year yielding 62.63%, the 10-year dipping below 69%, and the 30-year ratio falling below 68%.

Municipal Supply: The negotiated calendar for the week will have an expected volume of just over $11.16 billion with the largest deals of the week being the $2.3 billion New York City Taxable GO issue which AmeriVet will be participating in the Selling-Group. The State of Hawaii plans on issuing $1.5 billion in taxable GO bonds and $447 million in Highway Revenue Bonds. The City of Austin, Texas will issue $1.1 billion of Airport System Revenue and Refunding Bonds. Most notably and importantly for AmeriVet as a firm owned and operated primarily by Veterans, AmeriVet will be serving as a Co-Senior Manager for the Department of Veterans Affairs of the State of California’s $73.3 million Home Purchase Revenue Bonds transaction.

Have a great week!