Municipal New Issuance: Last week, the negotiated calendar totaled to just over $6 billion with the largest deal being the Regents of the California University System which issued $1.3 billion with $1.2 billion in tax-exempt bonds and $143 million in taxable bonds. The second largest deal of the week was the $503 million JEA Water and Sewer revenue bonds issue. AmeriVet was in one issue this past week as a Selling-Group-Member which was the $150 million South Carolina State Housing Finance Development issuance.

Municipal Secondary Trading: Secondary trading for the week totaled to about $37.45 billion for the week with 56% of trading being dealer sells. According to Bloomberg, clients put up roughly $5.2 billion up for the bid with Wednesday having the largest volume of bids-wanted totaling to just over $1.3 billion.

Municipal Spreads: Munis continued their slide this past week as we saw yields rise once again with 10-year notes rising by 3.2 basis points to close the week at 2.54%. As we continue to see yields rise, one bright spot of this is that we are seeing ratios slowly creep back up to normal levels. 10-year munis are now yielding 61.52% of Treasuries, last week the ratio was at 60.98%, and just one month ago those ratios were at 58.56%. The muni curve did steepen last week by 4.3 basis points to 85 basis points.

Municipal bond funds continue to see inflows into their funds, which according to LSEG Lipper Global Fund Flows, investors added about $211 million into those funds marking the third consecutive week of inflows. This follows last week’s inflow of $898 million.

With muni yields continuing to rise this month, we are starting to see munis cheapen compared to US Treasuries, but munis are still a long way off from their averages. Currently, 10-year munis are yielding approximately 62% of US Treasuries while long term averages are roughly 85% of Treasuries, and with recent averages, the 10-year ratio is approximately 73%. To achieve the 10-year muni average, we would need to see yields rise above 3%. We should expect to see yields to continue rising for ratios to come back to normal levels but not in the immediate near term.

Municipal Supply: The negotiated calendar will total to just over $3.8 billion as many issuers are in a holding pattern until the Fed rate decision. The largest deal of the week which AmeriVet will be participating as a Co-manager on will be the $1 billion New York State Thruway Authority revenue bond issuance. The next largest deal of the week will be the $800 million Triborough Bridge and Tunnel Authority issue, followed by the $442 million Massachusetts Development Finance Agency issuance. The 30-day supply is roughly $4.88 billion which is down from $9.26 billion supply from the previous week.