The municipal bond market in the Northeast has achieved a remarkable milestone in 2024, recording an unprecedented issuance of bonds amounting to $132.3 billion. This figure represents a staggering increase of $43 billion compared to the previous year, making the Northeast the standout region in terms of bond volume growth—47.9% higher than in 2023. A closer look demonstrates that this substantial rise not only eclipsed the region’s previous record set in 2020 but also marked a significant resurgence in financing across various sectors.
The bond issuance trends indicate that nearly every quarter witnessed higher volumes compared to the previous year, spanning almost every state and sector. Notably, new-money bonds surged by 39%, while the volume of refunding bonds saw a striking upturn of 76%, totaling $17 billion. This shift in focus towards a combination of new-money and refunding bonds almost doubled, a clear indicator of evolved financing strategies among issuers.
Transportation remains a consistent powerhouse within the municipal bond sectors, with 2024’s figures showing a remarkable increase of 67% to total $28.5 billion. Meanwhile, the education sector also registered a robust growth rate of 40%, reaching $17.5 billion. However, contrasting findings emerged within the healthcare and higher education sectors; healthcare bonds skyrocketed by nearly 200% to hit $10 billion, while higher education issuance plummeted by 76.8% to a meager $279 million, signaling serious challenges facing that particular segment.
Delving into state-specific performances, New York unsurprisingly retained its leadership position with $58.8 billion in bond sales, marking a 39% increase year-over-year. Pennsylvania followed suit with $16.5 billion, exhibiting a 36% growth, while Massachusetts highlighted its resilience with a 67% rise to $14.5 billion. New Jersey’s performance paralleled Massachusetts, boasting a notable 68% increase to $12.8 billion. Maryland made its entrance into the top five with a robust showing of $8 billion, almost doubling its previous year’s issuance of $4.4 billion.
Interestingly, high percentages of growth were noted from states that did not rank among the largest issuers. New Hampshire exhibited the most dramatic increase in bond volume, surging 251% to $5.6 billion, while Delaware also showed commendable growth by more than doubling its volume to $1.1 billion. Such spikes in issuance from smaller states often reflect localized fiscal strategies or emerging investment opportunities in infrastructure projects.
The landscape of major bond issuers in the Northeast saw notable changes in 2024. The New York City Transitional Finance Authority took the lead by issuing $10.6 billion, reaffirming its pivotal role. Close behind, the Dormitory Authority of the State of New York (DASNY) reported remarkable growth as well, amassing $10.5 billion this past year. In sharp contrast, the Triborough Bridge and Tunnel Authority, which was the fifth-largest issuer in the country in 2023, fell out of the national rankings, suggesting a cautious approach to issuing bonds due to uncertainties regarding congestion pricing.
An interesting addition to the rankings was the rise of the New Hampshire National Finance Authority, entering with $4 billion in bond sales—a figure that surpasses the entirety of the previous year’s issuance in the state. This reflects not only a changing dynamic in the municipal bond market but also the state’s proactive measures to leverage financing for its developmental projects.
On the advisory side, the Public Resources Advisory Group retained its top position as the leading municipal advisor, contributing significantly to $25.8 billion in deals. This highlights the firm’s strong network and expertise in navigating complex municipal financing requirements. New contenders in the advisory space, such as Frasca & Associates, have demonstrated substantial growth, capturing the second position with $15.3 billion, an impressive leap from the previous year.
The data also sheds light on the top bookrunners in the region, with BofA Securities leading the charge in underwriting a noteworthy $27.9 billion across transactions. The continued dominance of New York issuers in the top deals suggests both confidence and a healthy demand for municipal financing in the region.
The Northeast’s municipal bond market in 2024 has not only set records but has also demonstrated a resilience and adaptability crucial for sustainable growth in an evolving economic landscape. The trends of increased issuance across various sectors provide a promising outlook for municipal financing as issuers navigate their fiscal paths in the coming years.