Municipal Bond Market Update September 23, 2020 Once again, the market tone is a familiar one as interest borrowing costs available in today’s municipal bond market. rates are defined by the same consistency and stability that PMA’s clients are no exception to these benefits. This week, they have shown for several weeks now. The AAA Municipal the Village of Wilmette entered the market with a refunding Market Data (MMD) index closed on Friday September 18 bond issue with a par amount of approximately $16 million. at the same levels as the week prior with no change in every Beyond the favorable market conditions, the Village’s term of the yield curve, and only slightly changed by 0.01- transaction appealed to investors for two additional reasons. 0.02%, or 1-2 basis points (bps), in either direction compared First, the structure generated considerable interest with a to the week that ended September 4. Please see below for a short final maturity in December 2026 and large individual graph illustrating the level of interest rates in the municipal maturities that were greater than $2.5 million for five out of bond market since the beginning of the year. the six maturities. Second, the Village’s Aaa credit rating MMDMMD BondBOND Index INDEX: January JANUARY 2020 - Current 2020 CURRENT indicated to the investing community that they would be 3.5% purchasing a security for a reliable, healthy, and financially 5 Yr MMD 10 Year MMD 20 Year MMD disciplined community. In fact, according to its published 3.0% credit opinion, Moody’s does “not see any material immediate 2.5% credit risks for Wilmette” regarding the coronavirus outbreak. 2.0% In the end, the Village’s bond issue resulted in a True Interest Cost (TIC) of 0.42% for the entire financing. Needless to say, 1.5% both PMA and the Village were incredibly pleased with the 1.0% result. 0.5% The market continues to be strong and there are no significant 0.0% signs that interest rates will dramatically increase in the Jan 2 Feb 2 Mar 2 Apr 2 May 2 Jun 2 Jul 2 Aug 2 Sep 2 near future. If you are interested in learning more about the municipal bond market in general or about a specific bond According to the Bond Buyer, this week’s supply is estimated issue you have in mind, please do not hesitate to reach out to total $12.6 billion of municipal bonds, of which nearly to the team of advisors at PMA. In the meantime, please stay $9 billion is made up of tax-exempt financings and the healthy and be well. remaining $3.6 billion of bonds are taxable. While this is a healthy supply to the market, investor demand also remains strong. The Lipper Fund Flow Report indicated that long- Bob Lewis Andrew Kim Senior Vice President, Managing Director Director, Public Finance term municipal bond funds experienced positive inflows of PMA Securities PMA Securities over $500 million, marking the 19th week in a row that such funds had positive inflows. These factors underlie the strong Tammie Beckwith Schallmo Stephen Adams market that we have been seeing for some time now and Senior Vice President, Managing Director Director, Public Finance PMA Securities PMA Securities why issuers have been eager to take advantage of the low Financial Strategies for Stronger Communities.TM This document was prepared by PMA Securities, LLC for clients of the fi rm and its affi liated PMA entities, as defi ned below. It is being provided for informational and/or educational purposes only without regard to any particular user’s investment objectives, fi nancial situation or means. 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