Municipal New Issuance: The negotiated volume for the final full week of June totaled approximately $9 billion in issuance. The largest deal for the week was the $603 million Michigan State Strategic Fund taxable issue for the Flint Water Advocacy Fund, the lead syndicate manager was Barclays Capital. In addition the State of Tennessee issued taxable bonds in the amount of $491 million proceeds will be used to fund various capital project across the state. AmeriVet was a Co-Manager on one issue for the week that being the $385 million Pennsylvania Turnpike Commission issue. The issue had robust investor demand as underwriters lowered yields by 3-6 basis point bumps across each of the maturities

Municipal Secondary Trading: The final full week of June continued the trend of very light secondary trading, with volume totaling about $22.9 billion. Secondary trading continues to be below average as investors continue to hold onto their bonds then rather sell and pay taxes on their profits and then purchase bonds at high prices. According to Bloomberg, clients put out roughly $2.88 billion for the bid, which was down from the previous week of $3.1 billion.

Municipal Spread: For the second straight week municipal bond yields rose, which a brought some additional incentive for investors to put money to work as bond yields have been at or near their all-time lows this year. Overall, for the week the yield on the Bloomberg 10-year benchmark rose by 5.1 basis points to 1.02%. Municipal market performance improved compared to Treasuries this week as bonds maturing in 10 years are now yielding 66.97% of Treasuries compared with 67.29% a week ago. With the rise in yields we did see the municipal bond curve widen this week by 6.7 basis points to 143 basis points.

For the 16^th straight week investors have added to municipal-bond mutual funds showing that investors are still have an appetite for tax-exempt bonds as yields have been trending higher for the last couple of weeks. Investors added about $1.9 billion for the week an increase from the previous week of $1.85 billion marking the 3^rd straight week or more of inflows over $1.0 billion in size.

During the week, President Biden announced a tentative $579 billion bipartisan infrastructure deal that included the possibly of using direct pay bonds as a financing source. If implemented this would be similar to the Obama administration’s Build America Bond Program which was started in 2009. As part of this plan, the Federal Government could provide payments to the state or local government borrower to help subsidize their borrowing costs. One main issue that needs to be worked out is how much states share of the financing costs would and cities are reluctant to show support until that issue has been clarified. With tax-exempt bonds at near historic lows states want to have the federal government to provide a generous subsidy as an incentive to use the program. States are going to want to have a larger subsidy as it will lower the cost of capital for them relative to using with tax-exempt bonds for their capital needs.

Municipal Supply: As we head into the July 4^th holiday weekend the final week of June will have a very light negotiated calendar with an expected volume of around $4.3 billion with the bulk of the issuance in the beginning of the week. The largest and most notable deal of the week will be the $450 million New York City Municipal Water Finance Authority, which AmeriVet will be part of the syndicate. The City of Philadelphia will also be issuing around $298 million in airport revenue and refunding bonds. AmeriVet will also be a part of syndicate for the $262 million State of New York Mortgage Agency social revenue bonds that will include taxable bonds as well as tax-exempt bonds. The 30-day visible supply is down by 2.3 billion mainly due to the July 4^th holiday but should pick up as we move into the month of July.