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Weekly Muni Snapshot | August 2, 2021

Municipal New Issuance: The negotiated calendar for the final week of July continued the trend of the year with approximately $5.4 billion in issuance. The largest deal of the week was the King County Washington which issued $565.3 million of both taxable and tax-exempt bonds. The next most notable issue was $426 million City of Philadelphia which also issued taxable and tax-exempt bonds which were a combination of new money and refunding bonds.


Municipal Secondary Trading: Secondary trading for the week totaled $20.05 billion for the week as the level of trading is still far below the average weekly volume we are used to seeing. Trading volume averaged nearly $31 billion on a weekly basis back in 2019 and 2020, according to Bloomberg information sources. Customers put up roughly $2.06 billion up for the bid which Is down from the prior week where customer bids-wanted was $2.08 billion.

Municipal Spread: Municipal bond yields for the week remained virtually unchanged with the Bloomberg 10-year moving only 0.1 basis points to 0.845% . With a very light calendar investors and issuers were waiting for the White House to release the fact sheet on the infrastructure agreement, which unfortunately did not mention subsidizing municipal-bond issues for its infrastructure projects. With the lack of movement in the belly of the curve municipal bonds lagged Treasuries for the week as debt maturing in 10 years is now yielding 68.643% of Treasuries compared to 66.197 % a week ago. With the short end of the curve falling by 2.7 and with the longer end rising by 2.2 basis points the municipal bond curve steepen to 136 basis points.

For the 21st straight week investors added into municipal-bond mutual funds. According to Refinitiv Lipper US Fund Flows data the week ended Wednesday those funds saw a weekly inflow of $1.39 billion continuing the trend we have seen for most of 2020 and all of 2021. As we discussed last week high yield funds have been gaining more investor interest as many are seeking more yield in funds that buy lower rated credits. This week those high- yield funds saw $578 million of inflows.

With the influx on municipal investors flocking to higher yielding municipals has brought high-yield spreads to their all-time lows. For the first half of 2021 municipal high yield funds have in new asset of $13.7 billion which has driven borrowing costs to non-rated and lower investment grade rated bonds to 2.91% the lowest ever according to Bloomberg Barclays Indexes.

Municipal Supply: For the first week of August, the negotiated calendar will pick up slightly with an expected volume just over $6 billion. AmeriVet will be part of multiple deals for the week including the largest deal of the week, which is the $934 million New York City Transitional Finance Authority. AmeriVet will also be in the $166 million South Carolina State Housing Finance and Development Authority as a syndicate participant. Finally, AmeriVet will be in the $108 million Department of Veterans Affairs of the State of California as a Senior Co-manager which will be the second time AmeriVet will serve as a Senior manager on a municipal issue.