Southeast in a nutshell: a step behind 2020's national surge
March 4, 2021 12:38 PM
A slight increase amid a nationwide issuance surge
Municipal bond issuers in the Southeast sold $76.91 billion of bonds in 1,152 issues in 2020, putting volume slightly ahead of 2019, according to Refinitiv data. Nationally bond sales were up 13.4%.
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A changing region
Expect fundamental shifts in the region to drive issuance higher in the long run, according to John Mousseau, president, CEO and director of fixed income at Cumberland Advisors. “The Southeast — Florida, Georgia, the Carolinas, they will continue to see migration of Northeast citizens — [because of] retirement and taxes,” he said.
Florida was the Southeast’s bond-issuance keystone
In 2020, issuers from Florida made it the fourth largest source of municipal bonds nationally and the largest in the Southeast, trailed in the region by Virginia, Georgia and Alabama.
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Sunshine State sells region’s largest deal as bulwark against storms
Proceeds of the Southeast's largest deal of 2020, the Florida State Board of Administration Finance Corp.’s $3.5 billion of taxable revenue bonds, bolstered the state’s Hurricane Catastrophe Fund. “We really were looking to broaden the investor base, so that in the future when there may come a time when we need access to credit, we want everyone to understand this credit and what better way to understand this credit than to own it,” said Ben Watkins, director of Florida's Division of Bond Finance. “As a consequence the Cat Fund is going to be very well-positioned on a go-forward basis with an educated investor and analyst community for any future borrowings.”
State budgets stayed tight amid the pandemic
"One item that was missing in the region was deficit financing," said John Hallacy, founder of John Hallacy Consulting, LLC. "I do not think issuers in this region perceived the need. Instead they trimmed their budgets within reason."
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BofA tops the regional league table
BofA Securities topped the table of underwriters in the Southeast, credited by Refinitiv with $12.6 billion of volume on 96 bond deals. It was trailed by JPMorgan and Wells Fargo.
