Bond volume

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.

Municipal bond issuers in the Southwest, despite the pandemic — or perhaps in part because of the conditions it created — set a record for annual issuance.

Northeast municipal issuers sold $129.99 billion of debt in 2020 amid the disruption of the COVID-19 pandemic.

Municipal issuers in the Southwest sold $93.5 billion of debt in 2020, a year in which the coronavirus upended the way bond business is done.

While issuance fell significantly from 2020, it was higher than January's and only the fifth time in 35 years that volume exceeded $30 billion in February.

Issuance dropped 26.7% in January, tax-exempt issuance fell 32.6% while refundings and taxables saw smaller declines. Part of the drops were due to the typical nature of lighter January issuance but also issuer anticipation of potential federal aid to combat the pandemic.

After one of the worst sell-offs in municipal market history as COVID-19 began its rampage in March, the market rebounded to set the all-time record.

Although November posted the lowest monthly volume total this year, issuance has already exceeded 2019's total and is on track to set a new yearly record in 2020.