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AmeriVet Weekly Muni Snapshot

Municipal New Issuance: Last week’s negotiated calendar totaled to roughly $9.1 billion which marks the last significant and sizable issue week for the year. The largest deals of the week were the $1.1 billion New York City Transitional Finance Authority issue which AmeriVet participated in the Selling-Group. The next largest deal of the week was the $812 million Kentucky Public Energy Authority issuance. AmeriVet was part of two other deals this past week which were the $82 million Wisconsin Housing and Economic Development Authority issue as a Co-Manager and the $33 million New Hampshire Housing Finance Authority issuance as a Selling-Group-Member.

Municipal Secondary Trading: For the first week of December, secondary trading totaled to roughly $48.6 billion with 53% of trades being dealer sells. Secondary trading should start to dip slowly as many are beginning to wrap up the year. According to Bloomberg, clients put up about $7.42 billion up for the bid, with Thursday having the most volume of bids-wanted.

Municipal Spreads: The November rally has continued into the first week of December with yields on 10-year notes falling by 10.4 basis points last week to finish the week at 2.54%. With the really in munis, we continue to see munis outperform Treasuries as 10-year munis are now yielding 61.35% of Treasuries compared to the prior week when the ratio was at 61.84%. One month ago, that ratio was at 72.74% and this marks the fourth consecutive week that munis have outperformed Treasuries. The muni curve did steepen slightly by .4 basis points last week to 93 basis points.

We continue to see outflows from municipal bond funds despite the continued rally in munis. According to LSEG Lipper Global Fund Flows data, investors pulled out about $144 million from municipal bond funds. This follows the prior weeks outflow of $64 million.

Munis are poised to continue the November rally as the first eight days of the month have returned about .72%, bringing year-to-date returns to 4.73%. Prior to the November rally, we were poised to see back-to-back down years. Since then, munis have rallied roughly 100 basis points across the curve, with the front-end gaining the most. As ratios continue to outperform Treasuries, they are not slowing down as the 2-year munis ratio is at 59.45%, the 10-year munis at 61.35%, and 30-year munis at 86%.

Municipal Supply: The negotiated calendar for this week will have an expected calendar size of about $3.3 billion as many issuers are finishing issuing for the year. The largest deals of the week will be the $463 million City of Virginia Beach Development Authority followed by the $383 million State of Ohio refunding issue.