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AmeriVet Weekly Muni Snapshot

Municipal New Issuance: Last week’s negotiated supply totaled to roughly $9.8 billion with the largest deal being the $950 million New York City Transitional Finance Authority issuance which AmeriVet participated in the Selling-Group. The second largest deal of the week was the California State University deal that issued $462 million in taxable bonds and $337 million in tax-exempt bonds which AmeriVet participated as a Co-Manager. AmeriVet was also part of 2 other issuances this past week as a Selling-Group-Member. The Maryland Department of Housing and Community Development deal which issued $115 million in tax-exempt bonds and $185 million in taxable bonds and the $45 million New Hampshire Housing Finance Authority issue.

Municipal Spreads: For the third straight week in a row, muni yields fell with 10- year notes falling by 8 basis points to finish the week at 2.47%. With the rally in munis this past week, muni bonds were able to outperform Treasuries as 10-year munis are now yielding 64.46% of Treasuries. The prior week, the ratio was at 66.53%. The muni curve did flatten slightly last week by .9 basis points to 66 basis points.

For the first time in about a month, we saw muni bond funds have inflows, as this past week investors added roughly $1 billion to Muni bonds according to Refinitiv Lipper US Fund Flows data. This follows last week’s outflow of $136 million. This also is the first time since January that we saw an inflow of a billion or more. With next weeks 25 basis point rate hike being the last one for the year, we could continue to see investors come back to the tax-exempt market.

As we head into the final week of July, July continues to be a positive month for munis as month-to-date returns are at .65% and a year-to-date return of 3.34%. Compared to last year at the same time, we had a loss of 7.64% year-to-date. With demand continuing to outpace supply, and with the Fed expecting to only hike one more time this year, we should expect to see positive returns for munis especially in the long end.

Municipal Supply: The negotiated calendar for this week will have an expected volume of about $3.59 billion, with the largest deal being the $670 million Black Belt Energy Gas District issuance. Medina Valley Independent School District will be offering $363 million and the New Hampshire Business Finance Authority is planning on issuing $270.3 million.