https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
    • Latest videos
    • Product Guides
  • Resources & Events
    • Back
    • Resources
    • Webinars
    • White Papers
    • IWCE 2022
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
    • Latest videos
    • Product Guides
  • Resources/Events
    • Back
    • Webinars
    • White Papers/eBooks
    • IWCE Expo
    • Calendar of Events
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
  • Magazine
acc.com

Economy


Article

Municipal bond issuance reaches record peak after high yielding year, but could recede in supply soon

Municipal bond issuance reaches record peak after high yielding year, but could recede in supply soon

Municipal bonds sales reached their highest issuance ($52.5 billion) in October since the 1980s after riding on a year of great returns, but supply could soon scale back.
  • Written by Jason Axelrod
  • 2nd November 2016

Municipal bonds sales reached a record high issuance of $52.5 billion in October after riding on a year of great returns, but supply could soon scale back. 

October marks the biggest month of issuance since records began to be reported in the 1980s, Reuters reports. The last month that was comparable in terms of municipal bond issuance occurred in April 2008, when $51.4 billion was sold.

“We’re pretty bullish on the municipal market,” Ron Schwartz, a senior portfolio manager at Seix Investment Advisors, told ThinkAdvisor. “We think that this is going to be an asset class that is going to outperform in the years to come.” 

Another expert credits the presidential election and the prospect of the Federal Reserve raising rates in December for the record month.

"We had three weeks of exceptionally large issuance and there were a couple of factors driving issuers into the market," McDonnell Investment Management Senior Portfolio Manager Jim Grabovac told The Bond Buyer. "You have the presidential election plus an increasing probability the Federal Reserve will raise rates again in December."

Given the large supply of issued bonds, municipal bonds have decreased in price, according to TheStreet and ThinkAdvisor. Schwartz, who manages the RidgeWorth SEIX Investment Grade Tax-Exempt Municipal Bond Fund, told TheStreet that issuers are working hard to raise capital in this period, and he told ThinkAdvisor he is recommending people buy municipal bonds at this time. 

The record month of issuance caps off nearly a year of bullishness for municipal bonds. As of October 15, municipal bond mutual funds had shown 53 weeks of inflows, the Associated Press reports. California ($57.38 billion), Texas ($48.44 billion), New York ($39.49 billion), Pennsylvania ($18.49 billion) and Florida ($16.23 billion) are the top five issuers of municipal bonds among states in the year to date, according to The Bond Buyer.

Over the past two years, municipal bonds’ low interest rates have attracted foreign investors to the municipal bond market, despite them not qualifying for the tax-related advantages U.S. investors enjoy, according to the AP. 

“Munis have been the darling asset class of the past two or three years,” Chris Alwine, head of Vanguard’s municipal group, told the AP.

However, some believe this record issuance could scale back in the coming months.

The iShares National Muni Bond exchange-traded fund — the largest municipal bond ETF by assets — reported a slim loss in July for the first time in 10 months, the AP reports. While it posted a gain in August, it recorded losses in September and October, too.

Schwartz believes the supply won’t be “overwhelming” come December, according to ThinkAdvisor.

Nevertheless, he is confident that while issuance may slow, demand for municipal bonds will not.

“We just think the demand factor is going to be strong, remain strong,” he told ThinkAdvisor. “Maybe it’s not going to have flows like we did this year, but still individuals are going to continue to invest in municipal bonds.”

_____________

To get connected and stay up-to-date with similar content from American City & County:
Like us on Facebook

Follow us on Twitter
Watch us on YouTube

Tags: Economy News Article

Most Recent


  • Homelessness
    Report: Police response to homelessness is inherently punitive
    Clearing encampments and arresting those living on the streets might temporarily remove homelessness from the public eye, but it doesn’t help unhoused residents retain housing or recover their longterm stability. Even so, a new policy brief from the researchers behind Boston University’s annual Menino Survey of Mayors finds the majority of American cities still rely […]
  • suburbs
    10 best suburbs for city-like living
    As more people are moving out to the suburbs, they still crave those city-living amenities like restaurants, shopping and engagement. So, suburban areas are adopting more urban aesthetics and principals, creating vibrant and connected communities. StorageCafe recently looked at the best U.S. suburbs with that urban flair, to see where people can find the right […]
  • cities
    Gallery: Annual index ranks America's top performing cities; most are in the West
    Starting with the pandemic and the economic uncertainty that came along with it, it’s been a difficult few years for cities across the United States. As a testament to the resiliency and commitment of public administrators, American cities continue to thrive—with many of the fastest growing communities located in the West, according to the Milken […]
  • 2022 Crown Communities Award winner: Miami-Dade County Clerk of Courts' jury selection system
    The Miami-Dade County Clerk of Courts is revolutionizing the jury selection process.  In many jurisdictions, jury duty is perceived as an obligatory nuisance. On their appointed day, potential jurors arrive early and stay late. They read books or watch television to pass the time as judges and attorneys make in-person selections from the pool of […]

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Prioritizing rapid restore leads to stronger ransomware attack recovery
  • Rethinking the ways cities can invest in vital neighborhoods
  • How to innovate and invest on a budget in state and local IT services
  • Treasury Department launches Coronavirus State and Local Fiscal Recovery Funds to deliver $350 billion in funding

White papers


5 reasons why Plan Examiners need Objective Trapeze

30th May 2023

7 Permitting & Licensing Fails Slowing Community Growth

24th May 2023

The Secret Ingredient to Local Government Employee Retention

23rd May 2023
view all

Webinars


How to Centralize and Build a Grants Management Process at your Organization

24th May 2023

Making Permitting Easier: What We’ve Learned Helping America’s Largest Cities Improve Their Permitting Process

16th May 2023

Digital Property Tax Collection: Tales from the Trenches of Modernization

16th May 2023
view all

PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

GALLERIES


10 best suburbs for city-like living

1st June 2023

Gallery: Annual index ranks America’s top performing cities; most are in the West

30th May 2023

Gallery: Top 10 American cities for seasonal and summer jobs

25th May 2023
view all

Twitter


Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.