Bond volume

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.

With federal aid rolling out, the municipal credit picture is improving and issuers are coming to market at a faster clip. An infrastructure package could push issuance levels even higher.

The first quarter of 2021 concludes with $102.1 billion, slightly higher than the $95.3 billion that the market saw in the COVID-ravaged first quarter of 2020.

Far West municipal issuers sold $99.1 billion of debt last year, a 16% increase from 2019, picking up the pace in the second quarter after a hiccup in March when the coronavirus first put society on pause.

Far West municipal issuers sold $99.1 billion of debt last year, a 16% increase from 2019.

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.

Municipal issuers in the Southeast sold $76.9 billion of bonds in 2020; $3.5 billion for Florida's Hurricane Catastrophe Fund was the region's biggest deal.

Refunding volume swelled in the Midwest by 53% in 2020, driving bond issuance in the Midwest to a 15.8% year-over-year increase, to more than $83.5 billion.

From the use of taxables to forward deliveries, refunding deals drove an overall 15.8% hike in Midwest bond volume that exceeded the national average.