Municipal New Issuance: The negotiated calendar for last week totaled to just over $12 billion. The largest deal of the week was the $3.5 billion Texas Natural Gas Securitization Corp which saw strong demand as they originally offered debt due in 2035 at +125 to Treasuries but tightened to +100 to Treasuries. Their 2041 maturity also saw spreads tighten as well, as they were originally offered at +162.5 spread to Treasuries then tightened to +137.5. AmeriVet participated as a Co-Manager on the next largest deal which was the State of California $1.8 billion taxable issue which also saw spreads tighten as demand was high for their bonds as well. AmeriVet was also in two other deals as a Selling-Group-Member which were the $1.9 billion New York City Water and the $1.2 billion Triborough Bridge and Tunnel Authority issues.

Municipal Secondary Trading: Trading for the week totaled to roughly $38.13 billion for the week with about 53% of trades being clients buys. With a large primary calendar last week, secondary trading took a back seat. According to Bloomberg, client’s bids-wanted was down with clients putting up about $3.59 billion up for the bid, compared to $5.45 billion the week before.

Municipal Spreads: For the first time in roughly a month, we saw muni yields fall with the shorter end firmer on the front end with 10-year notes falling by 13.2 basis points to 2.54% for the week. With Treasuries rallying last week, munis lagged Treasuries for the week with the 10-year ratio yielding 69.03% compared to 67.72% from the prior week. We did see the muni curve flatten to finish the week off at 72 basis points.

For the fifth straight week, muni-bond funds saw investors pull investments out of their funds. According to Refinitiv Lipper US Fund Flows data, last week investors pulled roughly $308 million out of muni-bond funds. This follows the prior weeks outflow of $905 million.

2023 seems to be a roller coaster ride as we started off the year on a high note with January returning about 2.87% for the month. Unfortunately, it was the worst February since 2008 as we lost most of the gains we had with muni bonds losing 2.26%, giving us a small gain of just .55% for the year. March so far had just only eight trading days returning just .23%. Although it is a small sample size, we still need to cognizant of the fact that we still have CPI data coming this Tuesday and that payroll numbers came in higher than expected. A 50-basis point rate hike is gaining more and more traction.

Municipal Supply: The negotiated calendar this week will be down from last week’s issuance of $10 billion with an expected volume of about $5.9 billion. The largest deal of the week will be the State of Oregon, which plans on selling $955 million in bonds which AmeriVet will be in the Selling-Group. The next largest deal of the week will be the $950 New York City Transitional Finance Authority which AmeriVet will also be in the Selling-Group. AmeriVet will also be in the $150 million State of New York Mortgage Agency issue as a Co-Manager.