Municipal Bond Supply Set to Shrink as Redemptions Exceed Sales

2014-11-10 13:14:36.988 GMT
By Ken Kohn

Nov. 10 (Bloomberg) -- The U.S. municipal bond market is poised to contract in the next month as redemptions and maturing debt exceed sales of new securities.

The gap between redemptions and new debt, a signal of supply and demand in the $3.5 trillion municipal market, will reach $27.2 billion over the next 30 days, compared with a contraction of $4.67 billion last month, according to data compiled by Bloomberg.

States and localities have scheduled $8.68 billion of sales in the next 30 days, compared with $6.27 billion on the previous trading day, the data show. Supply figures exclude derivatives and variable-rate debt.

Municipalities have announced $20.4 billion of redemptions and an additional $15.5 billion of debt matures in the next month.

California, Hawaii and Dallas Area Rapid Transit have scheduled sales in coming weeks.