December 6, 2021

Municipal New Issuance: The negotiated calendar totaled to just under $7 billion with only two deals being over $700 million. The largest deal of the week was the $704 million Black Belt Energy Gas Project revenue bonds. The second largest deal was the $700 million Illinois State Highway Authority revenue bonds. Even with the light calendar AmeriVet had a very busy week as we were in three deals. AmeriVet was Co-manger on the $125 million New Jersey Housing and Mortgage Finance Agency deal taxable and tax-exempt deals. We were also a Co-manager on the $94 million Wisconsin Housing and Economic Development Authority Housing Revenue bonds. Finally, AmeriVet was on the $430 million New York State Housing Finance Agency Affordable Housing Revenue bonds.

Municipal Secondary Trading: Secondary trading returned to their normal trading levels for 2021 with about $27.4 billion in secondary trades with 54% of all trades being dealers selling to customers as traders returned to their desks from the Thanksgiving Holiday. As with secondary trading, customer bids-wanted also returned to their normal levels with customers putting up roughly $3.2 billion for the week.

Municipal Spread: Municipal bonds had fell for the week with yields on state and local debt falling by 0.4 basis points to 1.06%. Even though municipal bonds did rally for the week they did underperform Treasuries as the 10-year ratios is now yielding 78.12% of Treasuries, compared with 74.32% from the previous week, but still lower than a month ago of 74.26%. With the drop in yields across the curve, we did see the gap between short-term and long-term bonds flatten by 6.1 basis points to 129 basis points, one month ago that gap was 153 basis points.

For the 39^th straight week Investors added to municipal-bond mutual funds to the sum of $36 million during the week ended Wednesday according to Refinitiv Lipper US Fund Flows data. This follows the pervious weeks inflow of $720 million. The small weekly cash inflow was due in part of the Thanksgiving Holiday.

Municipal bonds had a strong November with returns of .85% for the Bloomberg Municipal Bond Index and a year-to-date gain of 1.35%. High Yield bonds had the best returns with returns of 1.31% and still leads all municipal bond indexes for the year with returns of 7.49%. These gains not only snapped a three- month losing streak but were also one of the highest monthly returns for 2021. Current year-to-date gains are still far below 2020 returns where we saw municipal bonds gaining more than 5% in the Bloomberg Municipal Bond Index (LMBITR).

Municipal Supply: The negotiated calendar will be rather robust with an expected volume of about $13.2 billion with the largest deal being the $4.2 billion Golden State Tobacco Securitization Corporation taxable issue and tax-exempt refunding issue. The next largest deal of the week will be the $1.1 billion San Joaquin Hills Transportation Corridor Agency who will be issuing both taxable bonds as well as tax-exempt revenue refunding bonds. AmeriVet will be in one deal this week which will be the $319 million New York City Housing Development Corporation.