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Abstract: 

The municipal market’s landscape has changed and taxable municipal bonds are here to stay. For issuers, the option to issue taxable debt to fund capital improvements or to advance refund tax-exempt debt for present value savings has been a game changer. The elimination of advanced refundings in the 2017 tax act caused municipal issuers to pivot and find new financing methods and vehicles. The issuance of taxable municipal bonds is not new. The market had to change when the Build America Bond (BAB) program was introduced after the Great Recession of 2008. The BAB program introduced the value poposition of municipal bonds to the world, and although the program was short-lived, its impact on the market has remained. This article is based on a panel by the same title presented at the 2021 Annual Conference of the National Federation of Municipal Analysts held virtually on May 12 and 13, 2021.

Keywords: Taxable municipal bonds, Build America Bonds, corporate CUSIP, liquidity, ESG investing

Affiliations:  1: PFM; 2: JP Morgan; 3: Rothesay Asset Management.