Issuance of U.S. municipal bonds fell slightly in April, but sales for the first four months of 2015 jumped more than 67% compared with the same period a year earlier, according to Thomson Reuters data released today.
Total sales in April were $39.3 billion, 9.5% lower than March, but 55% higher than the $25.3 billion sold in April 2014. The spike in sales this year—there has been $143.2 billion of municipal issuance in the first four months of 2015 compared to $85.4 billion during the same period last year—is due to more issuers refinancing, market watchers say.
Next week, Louisiana is set to offer the largest municipal bond offering of any state, with $335 million in general obligations bonds set to be sold. The Los Angeles Unified School District, meanwhile, will offer up $330 million of general obligation refunding bonds; the Los Angeles Community College District has $310 million of general obligation refunding bonds available; and the Indiana Finance Authority plans to sell $302 million of stadium lease appropriation refunding bonds.
Despite the large figures, next week’s sales will be relatively small in size, with an estimated $9.8 billion of issuance, according to Thomson Reuters data. This week, municipal issuance totaled $4.9 billion.
“The story for the first part of 2015—and April specifically—has been low interest rates,” says Tom Kozlik, managing director and municipal credit analyst at Janney Capital Markets. “That environment has created refundings, refundings, refundings.”
Issuers sold $101.2 billion of refunding bonds in 2,544 deals during the first four months of this year, more than double the $42.2 billion of refunding bonds sold during the same period in 2014 across 1,244 deals, the data show.
