There has been plenty of analysis about declining muniland bond issuance at the gross level, but very little diving down into more specific monthly data. MSRB’s EMMA platform provides the data for parsing.
If you are an investor, an analyst or a taxpayer, finding information about the outstanding debt for a state or a city is a mixed lot. Some issuers, like New York City and Connecticut, do an excellent job of providing information. Massachusetts remains the gold standard. Many other issuers though have out-of-date and incomplete information.
One of muniland’s most accurate forecasters, Tom Kozlik of Janney Capital Markets, has some astonishing numbers in a new report. He predicts that total municipal bond sales for 2014 will drop to between $250 and $275 billion. That is a big fall from 2013 issuance of $330 billion. Here are some of the factors that Kozlik used to develop his rationale for a shrinking muniland:
Eight out of ten times when state and local governments need to borrow money, they go to the municipal bond market. The public information repository EMMA, which is offered by the MSRB, allows anyone and everyone to assess how the borrowing affects the borrower’s capital structure and predict whether bondholders will be paid back.
For retail investors, it has always been a little murky where their municipal bond trades are executed. Municipal bonds can officially trade on the New York Stock Exchange Bonds platform, but they rarely do. Instead, almost all municipal bond trades happen over-the-counter between dealers via alternative trading platforms like Bonddesk (a part of Tradeweb that is majority-owned by Thomson Reuters) or The MuniCenter. Unlike the equity market, municipal bond brokers are not required to disclose where they execute a specific trade.
Some great new tools have arrived in muniland that begin to stretch the boundaries of how we organize and process our endless information. Staying on top of 80,000 municipal issuers, 50 states and unlimited private activity issuers is no easy task. Check out some of the new arrivals:
When I put up a post about bond insurance and default rates last week, I expected pushback from proponents of municipal insurance. I got some.