Tags: janney | municipal | bond | debt

Janney: Muni Debt Sales Will Drop Every Year Through 2017

Thursday, 22 May 2014 01:26 PM


U.S. municipal-bond issuance will decrease every year to as low as $175 billion in 2017 as rising interest rates and austerity measures curb borrowing, according to Janney Montgomery Scott LLC.

States and localities will borrow $250 billion to $275 billion in 2014, the second consecutive year of declines, Tom Kozlik, director of municipal credit analysis at Philadelphia-based Janney, said in a report.

The years of $300 billion or more of total issuance “are likely in the past,” Kozlik said. “A higher interest rate environment and our other qualitative factors will help keep new money issuance closer to pre-2000 levels.”

Yields on 10-year Treasurys, a benchmark for borrowing rates, will climb by 0.97 percentage point to 3.52 percent a year from now, according to the median forecast of 64 analysts in a Bloomberg survey.

Janney estimates sales will drop to as low as $225 billion in 2015, $200 billion in 2016 and $175 billion in 2017.

States and localities have sold $95.2 billion of long-term, fixed-rate debt this year through May 16, or about 28 percent less than the $131.7 billion issued during the same period in 2013, according to data compiled by Bloomberg.

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U.S. municipal-bond issuance will decrease every year to as low as $175 billion in 2017 as rising interest rates and austerity measures curb borrowing, according to Janney Montomery Scott LLC.
janney, municipal, bond, debt
193
2014-26-22
Thursday, 22 May 2014 01:26 PM
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