Amid a municipal bond volume boom, Northeast gained the most

Municipal bond volume in the Northeast increased more than any other region in the first half of 2024. Issuers sold $61 billion of debt in 678 deals, a 55% increase over the same period last year.

Each of the region’s 11 states outpaced its volume from last year, according to data from LSEG, with most seeing increases of more than 50%. The District of Columbia fell short of last year’s volume, and no municipal bonds were issued from Puerto Rico and the U.S. Virgin Islands. 

The big increase came amid a national boom in municipal bond sales; total issuance in the first half was $242.16 billion in 4,208 deals, a 32.3% increase over the first half of 2023, according to LSEG data. 

Northeast issuers started the year strong with $30.9 billion across 274 deals in the first quarter. They kept it up in the second quarter with $30.7 billion in volume across 404 issuances. 

Last year, the Northeast had the biggest drop in volume of any region, partly due to high rates and few refunding opportunities. This year, issuers have found rates more favorable, according to John Hallacy, founder of John Hallacy Consulting LLC. Some issuers also faced pressing needs for debt. 

“All the states have been fairly active,” Hallacy said. “Let’s face it, we have a lot of older infrastructure that requires heavy maintenance or replacement.”

Northeast issuers offered more debt in nearly every sector and every category of bond. Development and healthcare volume both more than tripled, to $1.23 billion and $4.87 billion, respectively. 

Transportation debt was the biggest sector beyond general purpose, and came in at $13.7 billion across 36 deals — up 84.5% from the $7.6 billion in the same period last year. 

“Transportation is on the rise,” Hallacy said. “They’re getting some assistance from all the federal aid, but they just need to get things done, and rates have been relatively good.”

New-money debt increased 47.5% to $45.43 billion from last year’s $30.8 billion. Refunding issuance increased 50.2% to $9.36 billion from last year’s $6.24 billion. And deal LSEG categorizes as combined new money and refunding were up 169%, to $6.85 billion across 22 issuances, compared to $2.55 billion in the first half of 2023. 

Issuers sold slightly more GO debt than in the first half of last year — $16.86 billion, up from $15.34 billion — but revenue bonds increased by 84.7%, to $44.77 billion from $24.25 billion. 

Tax-exempt volume increased by 50.8%, to $52.98 billion from $35.14 billion. Taxable debt increased to $4.25 billion, a 28.5% increase. Debt with interest subject to the Alternative Minimum Tax increased to $4.4 billion in 14 issuances, a 288% increase from $1.13 billion in 13 issuances in the first half of last year. 

Issuance is likely to stay strong through the rest of the year, Hallacy said. The expectation of interest rate cuts has created “momentum,” he said, and the high volume of redemptions in July and August means there’s plenty of demand.

The biggest issuers, as usual, hailed from New York. The Dormitory Authority of the State of New York issued $4.8 billion in the first half of the year, and the Triborough Bridge and Tunnel Authority came in second, with $3.61 billion. Four other New York issuers had places on the list of the Northeast’s top ten issuers. 

Hot on the TBTA’s heels, Massachusetts issued $3.35 billion in the first two quarters of the year. The commonwealth is climbing the rankings after coming in as the sixth biggest issuer in the first half of last year. Massachusetts’ Development Finance Agency also made the top ten issuers, coming in 9th place with $2.04 billion of bonds.

New Hampshire’s National Finance Authority — the entity responsible for much of New Hampshire’s new volume — made the eighth spot on the list, with $2.05 billion, and the New Jersey Educational Facilities Authority brought up the rear with $1.73 billion.

Nine of the ten biggest Northeast deals this year came from New York issuers; five were from the city, and four from the state. DASNY secured the top spot with its $2.88 billion March 14 deal. That tax-exempt deal was managed by RBC Capital Markets, Barclays and Ramirez. 

The second-biggest deal was the June 18 issuance from the New York Transportation Development Corporation, to support a P3 terminal development at John F. Kennedy International Airport, sized at $2.55 billion and managed by BofA Securities and Loop Capital Markets. 

New York demonstrated its dominance on big transactions. In the first half of 2023, Massachusetts, the District of Columbia, and New Jersey also had spots on the top ten biggest Northeast deals; this year, only Massachusetts made the list. The commonwealth claimed the third place spot on Jan. 11, with a $1.88 billion GO deal, new money and refunding, managed by BofA Securities and Siebert Williams Shank. 

In total, New York issuers offered $28.03 billion of bonds in the first half of the year. That’s up 55% from the same period last year, when the state’s issuers sold $18.08 billion, and even above the $26.9 billion from the first half of New York’s historic 2022. 

New Hampshire was home to the biggest jump in volume. The Granite State’s issuers offered a combined $2.69 billion across 26 deals. That’s a 360.6% increase from the first half of 2023, which had $584.2 million in 15 deals.

The housing sector grew more than any other in the state. Through seven deals, the state has issued $946.9 million this year, compared to $73.6 million across three deals in the first half of last year. 

Volume from Massachusetts more than doubled. Issuers there offered $9.94 billion of bonds across 100 issues; in the first half of 2023, Massachusetts’ issuers sold just $4.67 billion across 81 issues. 

Rhode Island came in third in growth among Northeast states. The state’s $1.12 billion wasn’t quite double its volume from 2023 — that year saw $582 million in its first two quarters — but it was a 92% increase. The $1.12 billion of bonds came from just 17 deals, which is only three more than the first half of last year. 

The only Northeast entities to see a drop in volume were the District of Columbia, where volume fell to $1.01 billion from $1.71 billion, and Puerto Rico, which had one $52.9 million issuance last year and none this year. The Virgin Islands issued no bonds either year. 

The Northeast’s top bookrunner was BofA Securities, according to LSEG’s tallies. BofA took the top spot in the first half of last year, too, but was credited with a big volume increase to $12.63 billion from $7.1 billion. The rest of the bookrunners also saw growth in their deals, including runner-up Jefferies, credited with $6.34 billion; RBC Capital Markets, at $6.24 billion; Morgan Stanley, with $6.14 billion; and J.P. Morgan Securities, with $6.03 billion. 

The top law firm in the Northeast was Bryant Rabbino, credited by LSEG with $6.05 billion; followed by Locke Lord, a newcomer to the top ten list with just under $5 billion; Orrick Herrington & Sutcliffe, Hawkins Delafield & Wood, and Nixon Peabody. 

The Public Resources Advisory Group was once again the top financial advisor in the Northeast, credited by LSEG with $12.42 billion, up from $7.1 billion over the first half of 2023. PFM Financial Advisors nabbed the second place with $6.33 billion, followed by Frasca & Associates, Acacia Financial Group, and Hilltop Securities.