To get a closer look at the dynamics of the muni marketplace as we move into the back half of 2021, Loomis, Sayles & Company’s Municipal Bond Team member and Investment Strategist Jim Grabovac offers insight.
What do muni market fundamentals look like at this phase of the recovery?
We have already seen an accelerated pace of new issue volume in municipal bonds this year. We think this will certainly be impacted by the outcome of President Biden’s infrastructure bill.
So, an infrastructure deal could mean lots of new issuance?
Has the Delta variant impacted your team’s views on any sectors?
Despite likely pent-up demand for business travel, that sector’s rebound could be softened by fundamental behavioral changes related to travel and large crowds. The convention center debt backed by general sales or governmental support has recovered at a faster pace than those names that rely on volumes of convention/business travel activity. Furthermore, our positive outlook reflects the expectation that the credit quality of names within this sector will generally be improved a year from now.
With Democratic control of the White House and Congress, do you see related impacts for any particular municipal bond sectors?
How might Biden’s focus on climate risk impact the muni market?
Would you consider an active management approach to munis to be particularly timely right now?
This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.
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