Municipal New Issuance: The negotiated calendar for the first week of 2022 saw only $1.8 billion in issuance with over half of the issuance coming from just two issuers. The largest deal of the week was the $521 million Orange County Pension taxable revenue bonds followed by the Los Angeles County Department of Airports $505 million revenue bonds.

Municipal Secondary Trading: The first week of 2022 we saw back to normal secondary trading volume with roughly $26.8 billion in trades, with 55% of the trades going to clients. This is up from the previous week of just $18 billion. As with trading being up, we did see clients increase their bid list to $3.43 billion for the week, which is up from the prior holiday week of just $1.37 billion of bids-wanted.

Municipal Spread: For the the first week of 2022 saw spreads rise, with the yields on the 10-year notes rising by 13 basis points to 1.15% up from 1.02% from the prior week. Although, we did see yields rise, for the week, municipal bonds were able to outperform Treasuries, as the ratio for debt maturing in 10 years is now 67.13% compared to 69.51% a week ago. The municipal bond curve did flatten for the week even as yields rose for the week with the curve flattening slightly by just 0.1 basis points to 128 basis points.

Investors added about $841 million to municipal bond funds for the week ended Wednesday according to Refinitiv Lipper US Funds Flows Data, which marks the 44th straight weeks of gains and the first for 2022. High yield funds continue to see the most gains as they saw about $389 million in inflows.

Municipal bonds saw a record issuance for 2021 breaking 2020 record by 1.2%, and many Wall Street analysts are predicting another record year of issuance. From data compiled from Bloomberg municipal bond issuance totaled to $460.6 billion as borrowers took advantage of rates at their historic lows and demand for tax-exempt bonds continues to be high as Congress continues to debate of higher taxes for the wealthy. The consensus right now is that municipal bond issuance as low as $465 billion and as high as $520 billion. AmeriVet is expecting to see roughly $480 billion in issuance driven by higher inflation demand for tax-exempt bonds are still high along with the billions of dollars in pandemic aid from the Federal government that has yet to be used. We also do not expect the pending rates increases from the Fed to deter any new issuances as states should continue to borrow for the much their needed infrastructure plans

Municipal Supply: For the second week of 2022 we are expected to see the negotiated calendar have a volume of about $5.5 billion an increase from the prior week of just $1.8 billion. This is the first week of real supply but still light from normal levels we are used to seeing. This week’s calendar will have just 2 issues that will be above $500 million which will be the $862 million City of Chicago Board of Education who will be issuing refunding bonds. Followed by the $651 million State of Louisiana Taxable bonds for the taxable gasoline and fuels tax. AmeriVet will be a co-manager on the $24 million State of Wisconsin Master Lease COPS refunding issue.