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Race is on to sell tax-free bonds ahead of U.S. tax changes

That possibility, which first surfaced Nov. 2 in the U.S. House Republicans’ tax bill, would saddle nonprofits with higher borrowing costs as well as eliminate a way all muni issuers can take advantage of lower interest rates to save money.

“We’re seeing a huge race to get to market and every kind of transaction. December may be the best market for issuance that we’ve seen in a long time,” said Matt Fabian, a partner at Municipal Market Analytics.

Muni issuance totaled $40.3 billion in November, the biggest supply for that month since $45 billion of bonds were sold in November 2010, according to Thomson Reuters data. That was when issuers rushed Build America Bonds to the market before the federal government’s subsidy program for the debt expired at year end.

Tim Holler