California, Flush With Cash, Snubs Muni-Bond Sales for Projects
- Issuance has slumped about 35% to $37 billion so far this year
- Golden State falls to No. 3 in US for muni bond sales in 2022
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California’s municipal-bond market is typically the busiest in the nation. But this year, activity has quieted dramatically.
The Federal Reserve’s campaign to tame inflation by raising rates has dampened debt sales in the muni-bond market, especially bond sales used to refinance debt with higher interest rates. In California, the drop is especially notable. That’s because federal aid and better-than-expected tax collections are allowing the Golden State and its municipalities to eschew bond sales and pay for infrastructure projects with cash.