Muni Market Focus: Tax Reform, Advance Refundings, Private Activity Bonds
November 20, 2017   //   by Mischler MarCom   //   Muni Market  

Municipal Debt Offerings Scheduled Week of Nov 20 2017 via Mischler Muni Market Update.  The Nov 203 edition looks back to last week’s metrics and provides a lens on municipal bond offerings anticipated for this week.  As always, the Mischler Muni Market Outlook offers public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of the prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings tentatively scheduled for this week’s issuance.

Last week muni volume was about $8.5 billion. This holiday shortened week volume is expected to be $4.2 billion.The negotiated market is led by $2.0 billion for Metropolitan Transportation Authority, NY. The competitive market does not have any deals over $100 million.

Last week munis were focused on tax reform and the potential elimination of private activity bonds (PABs)and advance refundings. The impact of both being in the final bill would significantly reduce muni volume going forward. If only advance refundings are included (since the Senate bill did not include private activity bonds) the reduction could be something like 30%-40%. In addition, the market could see a significant increase in volume in what is left of 2017 as issuers try to accelerate advance refundings, like MTA which increased its financing from $600 million to $2 billion this week. Towards the end of last week, concern about the ability of the Senate to pass tax reform, the Fed indicating it might finance deficits with short debt versus its previously mentioned ultra-long (50-100 year) bonds and still looking for one more hike in 2017 and three in 2018 all put pressure on the short end of the market and further flattening of yield curves as muni’s hit 140 basis points for the 2-30 year spread last Friday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

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Snce 2014 alone, minority broker-dealer Mischler Financial Group Inc.’s  presence across the primary Primary Debt Capital Markets (DCM) space has included underwriting roles in which Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.


Mischler Financial Group is the securities industry’s oldest minority broker-dealer owned and operated by Service-Disabled Veterans. Mischler is also a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE).  Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

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Mischler Muni Market Update Week of Nov 20 2017 Muni Market Focus: Tax Reform, Advance Refundings, Private Activity Bonds