Bond volume

Household and U.S. bank ownership of individual bonds fell and the total face amount of munis outstanding was down 0.6% quarter-over-quarter and down 1.4% year-over-year, Fed data shows.

Total volume for the month was $31.795 billion in 515 issues, down from $45.555 billion in 985 issues a year earlier, according to Refinitiv data.

Total volume for the month was $18.303 billion in 391 issues versus $31.602 billion in 877 issues a year earlier, according to Refinitiv data.

A substantial drop in new money volume sets California and the Far West apart from the the country.

Spending on climate proofing infrastructure and other green capital developments increased 68% while overall volume tumbled 13% in the region.

Midwest borrowing last year went from 11% year-over-year growth in the first quarter to a 48% plunge in the fourth quarter.

Rising interest rates depressed refunding opportunities, but new money issuance rose amid demand for infrastructure to serve the region's growing population.

Total volume in 2022 was at $389.094 billion in 9,123 deals, down 19.5% from the $483.358 billion in 13,130 deals in 2021, according to Refinitiv data.

The transportation bond sector may see the greatest growth in 2023 as a result of the infrastructure act, one analyst said.

"The large taxable refunding or combined transactions were accomplished earlier in the year when rates were relatively low," says John Hallacy.

"I think ESG is here to stay in our market. I think it's a natural fit with the types of infrastructure that our market finances," said MSRB CEO Mark Kim.

"January issuance is at a multi-year low, with large declines in both taxable and tax-exempt issuance," said Matt Fabian, a partner at Municipal Market Analytics. 

The muni market saw $384.086 billion of debt sold in 2022, nearly $100 billion less than $483.234 billion in 2021.

Projections for total bond volume in 2023 are at a high of $500 billion and a low of $302 billion, continuing 2022's lackluster growth.

Investors will be greeted Monday with a new-issue calendar estimated at $3.214 billion, the majority of which is a nearly $1.9 billion private activity P3 bond deal from Pennsylvania.

Total November volume stood at $19.712 billion, the lightest of any month year-to-date, in 527 versus $37.073 billion in 1,055 issues a year earlier, according to Refinitiv data.

The Bloomberg Municipal Index is at positive 4.06% as of Friday. Bloomberg indices show high-yield returning 4.17%, taxable munis returning 4.38% in November while the Impact Index is at positive 4.66%.

With the Federal Open Market Committee meeting this week and the next week shortened by the bond market observance of Veterans Day, CreditSights strategists said "investors should be prepared for two weeks of subdued new issuance."

Total October volume was $24.951 billion in 510 deals versus $41.811 billion in 1,068 issues a year earlier, according to Refinitiv data.

While October is typically a busy issuance month, 2022 is not shaping up to be as more issuers are sidelined by volatility. The primary market will see another light calendar in the holiday-shortened week.