The Bond Buyer: Coronavirus causes lowest March bond volume since the 90s

March 31, 2020
Original article by Aaron Weitzman

Wesly Pate, Portfolio Manager at Income Research, spoke with Aaron Weitzman at The Bond Buyer about municipal bond volumes in March. As Wesly noted, on the tax-exempt side, most of the volume will come from new issuance, and he does not expect a significant deterioration in issuance if construction continues. However, on the taxable side, the $100 billion in issuance that investors were anticipating for this year could be significantly reduced by up to 30% due to higher yields. He anticipates that flows will come back in future; compared to other areas of the credit markets, municipalities are likely to have lower default rates, and the Federal Reserve is showing considerable support to local governments unlike never before. That said, uncertainty is likely to continue to weigh on the market throughout April.

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