Municipal bond issuance in 2020 was the highest in a decade, reflecting the collapse of interest rates and the increased costs cities and state governments are facing from Covid-19 shutdowns. Bonds for new projects reached $252 billion last year, according to Refinitiv, a small increase from the previous year. The new borrowing drove the total amount of outstanding muni debt above $3.9 trillion for the first time since 2013, according to the Federal Reserve data from the third quarter…. Despite the increase in availability of muni bonds, investor demand remains strong. Central bank rate cuts have left investors clamoring for yield. Muni bond investments produced steady returns last year in a low-interest rate environment.
Source: WSJ.
