00:00In part two of our muni moment, we're going to talk about mega deals and how they are driving
00:03a surge in supply. According to data that we compiled here at Bloomberg, municipalities have
00:09sold about $216 billion in debt so far this year. That is up about 10 percent from the same period
00:14last year, and it's due to infrastructure projects over $1 billion. Bloomberg municipal finance
00:20reporter Ashna Shah is covering this story, and she joins us now. So tell us a little bit more
00:24about these big, big projects that is driving these mega muni bond deals. So what we're honestly
00:29seeing is that this is a reflection of the infrastructure needs across the country. We're
00:33seeing airports, water systems, transit agencies, universities, all issuing a ton of debt right now,
00:39and a lot of them have big price tags. You know, these projects are getting more expensive to build
00:43as inflation costs go up, supply chain disruptions, and so municipalities are just having to borrow
00:49more. I was at a bond buyer public finance conference earlier this week, and one of the bankers talked
00:54about how a norm has become these mega deals, which are above a billion dollars. And on top of that,
00:59these super mega deals, which are above $2 billion. So we saw two deals above $2 billion happen in New
01:05York this year. So far, we've seen one in California for above $2.4 billion. So it is
01:10becoming a lot more common. It's becoming a lot more common. Are these deals being absorbed easily
01:15by investors? Yeah, investors are definitely hungry. I mean, we've seen a ton of issuance in
01:19the calendar this year. So far, a lot of muni firms are expecting $600 billion of issuance so far,
01:25and a lot of it is driven by these higher price deals. And so we've seen May has had a
01:30strong
01:30issuance calendar. And if the muni market does want to hit that $600 billion number,
01:35they're going to have to issue about $50 billion of debt each month for the rest of the year. And,
01:40you know, there is some skepticism around that because people are saying, you know, with rate
01:55I mean, you mentioned how it's being absorbed pretty easily right now, because there's a lot
01:58of a demand. But are these bigger deals a good thing overall for muni investors?
02:02Yeah, they can be pretty attractive for muni investors, because it gives them a lot more
02:06borrowing options and a lot more liquidity. And because these deals have become more common,
02:11it's actually reduced the penalty that issuers used to face or municipalities used to face when they
02:16are issuing such large deals and these higher borrowing costs.
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