April issuance fell as tariff-induced volatility led deals to be postponed or moved to the day-to-day calendar, many of which still have yet to come to market.
April's volume was $41.178 billion in 660 issues, down 8.4% from $44.945 billion in 707 issues in the same period in 2024, according to LSEG data. The month's volume total, however, outpaced the 10-year average of $35.436 billion.
Issuance year-to-date is up 8.6% at $161.012 billion.
Municipals through January to March were on an "upswing" as issuance rose every month year-over-year, said Giles Nicholson, senior managing director and head of the Public Finance Quantitative Solutions Group at Siebert Williams Shank.
However, April saw a decline in supply, mostly due to the week of April 7, he noted.
At the start of the month, MMD yields rallied 18 to 29 basis points, before selling off 85 to 98 basis points between Monday, April 7, and Wednesday, April 9, the day Trump's sweeping tariffs were set to take effect.
On April 9, Trump announced a 90-day pause on tariffs against all countries except for China, which sent MMD yields rallying 45 to 48 basis points on Thursday, April 10, before selling off again on Friday, April 11, with yields cut 25 to 27 basis points.
"There were transgressions of the tariff announcements and rollbacks, and then announcements, and then rollbacks and then announcements introduced a tremendous amount of volatility like we haven't really seen since the onset of COVID," said David Grean, vice president, trader and strategist at Payden & Rygel.
The volatility — specifically the third-day selloff at the start of the week — led to many deals either being moved to the day-to-day calendar or postponed.
Refunding deals that are "interest rate sensitive" faced quite the hurdle, with rates soaring nearly 100 basis points over that period, leading them to "fall out" and be postponed, Siebert's Nicholson said.
It's also unclear if the refundings that would have gotten done in April will come to market in May, as these deals may be delayed further, he noted.
Meanwhile, issuers paused new-money deals because they wanted to "get a better feeling for where they should be spreading and good market execution," Nicholson said.
"People weren't quite sure at the time what the right stretch should be [to price deals]. Even intraday, you weren't sure … both the investors and the issuers waited to have a better understanding of where the market was," he said.
Since then, the market has stabilized somewhat, with muni yields exhibiting smaller swings in either direction, and an influx of supply has returned to the market.
Last week alone saw $14 billion of issuance on tap, as some delayed deals priced, along with those already scheduled to come to market that week. However, this rebound in volume over the last two and a half weeks of the month was not enough to offset the lack of supply the week of April 7, resulting in issuance falling year-over-year.
However, the dip in issuance comes after a record year of supply at over $500 billion, Grean noted.
Supply in April 2024 was at $44.945 billion, the second-largest issuance for the month on record.
Despite a year-over-year decline in volume, April 2025 is the third-largest month for issuance.
Looking forward, the market needs to see if munis rally back down, a resolution to the tax exemption and the general rate environment with the Federal Reserve, Nicholson said.
"Then we'll get some more clarity around whether what happened in April is a blip or if there'll be less [refunding] volume than expected if rates stay higher than where they have been earlier in the year," he said, noting there will always be new-money needs.
However, Grean believes April does not disrupt the theme that 2025 will be another record year of supply.
Usually, in the summer, issuers go on vacation like everyone else, and things slow down, but like 2024, supply may be elevated during the summer months, Grean said.
The wildcard, though, remains market volatility, he noted.
"Rates are elevated relative to a lot of periods over the three years, pretty close to the highest this cycle, but for the first time in a long time, you've got cheaper issuance," Grean said.
"When you start to get north of 80% for all of the tenors across the municipal curve, that's when crossover buyers and other folks start to pick their heads up and pay a bit more attention to the tax-exempt market, so a good amount of demand may pick up for munis if these cheap ratios persist, and there's not a tremendous amount of 'talking head-induced volatility,'" he said.
April issuance details
Tax-exempt issuance in April ticked down 1.8% to $36.059 billion in 592 issues from $36.717 billion in 626 issues a year ago. Taxable issuance rose 6.1% to $4.525 billion in 62 issues from $4.266 billion in 69 issues in 2024. AMT issuance was $593.4 million, down 85% from $3.963 billion in 2024.
New-money issuance fell 11.8% to $27.44 billion from $31.101 billion, while refundings dropped 47.1% to $4.578 billion from $8.661 billion.
Revenue bond issuance decreased 44.8% to $17.044 billion from $30.89 billion in April 2024, and general obligation bond sales rose 71.1% to $24.134 billion from $14.055 billion in 2024.
Negotiated deal volume was down 4.4% to $33.225 billion from $34.766 billion a year prior. Competitive sales dropped 12.4% to $7.875 billion from $8.994 billion in 2024.
Bond insurance fell 18.9% to $3.268 billion from $4.031 billion.
Bank-qualified issuance dipped 1.8% to $625.8 million in 151 deals from 637.2 million in 161 deals a year prior.
In the states, the Golden State claimed the top spot year-to-date.
Issuers in California accounted for $29.358 billion, up 26.4% year-over-year. New York was second with $20.882 billion, up 8%. Texas was third with $15.016 billion, down 17.1%, followed by Florida in fourth with $6.334 billion, down 29.8%, and Massachusetts in fifth with $5.427 billion, an 8.9% decrease from 2024.
Rounding out the top 10: Pennsylvania with $5.046 billion, up 54.1%; Illinois with $4.817 billion, up 91.1%; Ohio with $4.806 billion, up 206.1%; Colorado with $4.638 billion, up 42.7%; and Wisconsin with $4.587 billion, up 31.4%.
