Bond volume

BofA Securities led with $62.01 billion of deals. Out of the top five, only Morgan Stanley increased its market share year-over-year.

The U.S. Treasury selloff caught up to tax-exempts with two to three basis point cuts to scales, but munis still outperform.

Municipal volume is estimated at $1.13 billion for the opening week of 2022. Persistently strong net supply challenges will bias credit spreads tighter, credit discipline weaker in the next few years, analysts say.

2022 volume projections are clouded by many uncertainties. What is not murky is that demand for municipals is unlikely to fade.

Investors will also receive $139 billion of interest payments in 2022, about $593 million more than in 2021, according to a report from CreditSights.

Total November volume was up 58.3% to $33.818 billion versus $21.359 billion a year earlier, but the figure is average over a 10-year period. A combination of factors from policy uncertainty in Washington to fears of rising rates led to the increase.

A majority of firms anticipate less volume in 2022 than the record hit in 2020, but how policies from Washington and the path of overall economic activity in a still-recovering global economy with COVID overhang make predicting volume more difficult.

CDFA is advocating for a holistic solution from Congress to address private activity bond challenges.

October has, on average, been the heaviest new-issue month of the year. Analysts said the lower volume, particularly taxables, was led by many issuers sitting on the sidelines, waiting for a potential package from Washington, D.C.

September issuance was down more than 32% from the same month in 2020; total issuance so far this year is at $346.48 billion, down 2.4% compared to last year.

The nearly 40% year-over-year decrease is a result of various factors including rising interest rates, other financing tools, such as forward delivery bonds, and simply that refundings are in less demand from issuers.

New money volume in the Far West was up 31.9% to $29.5 billion, while refunding volume rose a more modest 11%.

A large increase in new money bond issuance pushed the 11-state region to a big year-over-year volume gain.

An uptick in new money borrowing fell far short of making up for a decline in refundings.

Municipal bond volume in the Southwest region increased in the first half of 2021 as its seven other states more than made up for a decline in Texas.

Despite a slowdown in June, long-term municipal bond volume is ahead of last year's record-breaking pace with more than $231 million in six months.

Issuers sold nearly $60 billion of debt as states, cities and agencies adjusted to the COVID-19 environment and other variables.

July volume was $31.9 billion keeping the annual pace ahead of last year's record-breaking total. Issuance still lags demand by a large amount — $60 billion by many accounts for August alone — as redemptions coupon payments pile up.

While June was lower than 2020 in par, pandemic-related factors skewed last year's issuance totals, making the $42 billion issued this month high on a historical basis. Outside factors, such as federal aid and potential infrastructure plans, may affect issuance going forward.

Even with a 23.3% year-over-year drop in May, with five months now officially in the books, long-term muni volume stands at $169.45 billion, ahead of the $157.96 billion issued in 2020.