Refunding bonds

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

Much of the Oregon Health & Science University deal funds a hospital expansion, but it also includes a tender exchange and a privately placed forward refunding.

A lighter, $5 billion calendar, heavy on healthcare, kicks off November. Most participants agree volatility in U.S. Treasuries will be a leading factor for municipal market performance. Uncertainty in Washington also isn't helping the asset class.

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.

New York’s Hudson Yards development on Manhattan’s West Side was able to cover its debt service obligations despite the effects of the COVID-19 pandemic.

Several strategists estimate the municipal market will be 50% taxable in five years if a direct-pay bond option makes its way into law.

Ridership on the RTA's three service boards remains sharply below pre-pandemic levels but it benefits from coronavirus relief and stellar sales tax performance.

Market participants welcomed the municipal-related provisions in the reconciliation bill but are hesitant to start making bets on its passage.

The Kentucky Public Transportation Infrastructure Authority and the Kentucky Turnpike Authority plan refunding revenue bond sales this month.

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.

The absence of advance refunding and a direct-pay bond program in the bipartisan infrastructure package has lobbyists pushing for inclusion of those things in the reconciliation bill, a matter only weeks away.

The authority succeeded in selling unrated bonds to take out CCC-rated bonds.

Another replacement for exempt advance refundings, forward delivery bonds are attractive to issuers looking for savings and investors seeking incremental yield.

The $1.4 billion seaport revenue refunding bond deal Wells Fargo will price next week will be the largest port transaction since the COVID-19 pandemic began.

Treasury has already halted the sale of state and local securities, known as SLGS.

The two issuances under IRS scrutiny join an earlier debt issuance the county disclosed publicly late last year.

Whether a BABs-like program could make it into actual law in Washington is still highly uncertain. What is certain: Some form of infrastructure spending is must-pass legislation because federal-aid highway funding is set to expire in October.

Wednesday will be the first Senate vote on advancing a bipartisan infrastructure deal.

Issuers should recognize their ability to prepay debt is an extremely important term, and they should consult with their MAs to achieve the most liberal prepayment term consistent with the type of financing they are doing.

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.