Taxable bonds and COVID-19 are two of the main catalysts that helped February municipal bond volume ascend to its highest level since at least 1986, which is as far back as Bond Buyer data tracks.
There was $36.51 billion of volume in February, a 38.4% increase from the activity the market saw in February of 2019. Historically, the muni markets gets off to a slow start issuance wise at the beginning of the year. This was only the fifth time in the past 34 years that volume exceeded $30 billion for the second month of the year. January issuance totaled $29.6 billion.
Muni issuance continued its frantic pace as taxable issuance has taken the market by storm, fears of COVID-19 have pushed benchmark muni yields to all-time lows and issuers are coming to market to take advantage of these conditions.
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