(March 11): Loop Capital founder Jim Reynolds​​​​ expects municipalities to sell as much as US$600 billion (RM2.66 trillion) of bonds this year. The market has already seen the biggest start to a year since at least a decade.

Long-term state and local government bond issuance may reach US$550 billion to US$600 billion in 2025, based on volume so far this year, the chief executive officer of Chicago-based Loop said during a Bond Dealers of America conference last week.

Reynolds’ forecast tops the average projection for this year of US$524 billion by analysts Bloomberg polled in December, and if realised would surpass last year’s US$495 billion in record muni sales. The muni-bond veteran said he is “bullish on public finance”.

Muni debt sales have already risen 25% to US$89.3 billion so far this year, according to data compiled by Bloomberg. States, cities, schools, airports and other borrowers which delayed bond sales until after the US election in November and long-term pent-up infrastructure needs are fuelling bond issuance. The end of pandemic aid and large deals are also boosting activity.

“If we saw a US$1 billion muni deal five years ago, it was a big deal” but that is no longer the case given the number of such deals in 2024, he said.

While the equity, initial public offerings and mergers and acquisition markets have not been as strong as expected so far in 2025, “fixed income trading is off to a great start”, said Reynolds, who began his muni career as a short-term bond trader in 1981 and founded Loop in 1997.

The S&P 500 Index has dropped 4.3% this year. Meanwhile, the US Treasury market has jumped more than 2% and the Bloomberg US Municipal Index has gained almost 1%.

Uploaded by Siow Chen Ming