Ohio Attorney General Dave Yost said on Thursday he filed https://www.ohioattorneygeneral.gov/Files/Briefing-Room/News-Releases/2021-01-13-YOST-PI-Motion-for-FirstEnergy-Decoupli.aspx an injunction seeking to prevent power utility FirstEnergy Corp. from collecting $102 million.
Low interest rates, tight government budgets provide backdrop for muni bond boom
The Federal Reserve’s commitment to low rates suggests debt issuance will remain at a high level.
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By Jan. 12, 2021 5:30 am ET
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 and the highest since 2010, when a federal incentive program helped push the total above $270 billion. The new borrowing drove the total amount of outstanding muni debt above $3.9 trillion for the first time since 2013,.
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Freshly cleaned subway trains sits at the MTA Maintenance Facility in Queens. Scott Heins/Getty Images
The municipal bond market is starting 2021 on a strong note amid robust demand, light supply of new issues, and expectations of fiscal relief for state and local governments as well as potentially higher income taxes with full Democratic control in Washington.
A key indicator of tax-exempt bond demand, the yield ratio of 10-year triple-A munis relative to the 10-year Treasury note, stands at 66% and is at its lowest level in 20 years. The ratio began the year at around 75% after peaking at over 200% during the market turmoil last March. It has averaged close to 100% over the past 20 years.