August 2, 2025

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July issuance rises 29%

3 min read
July issuance rises 29%

Supply rose in July as issuance remained elevated week after week, pandemic-era aid dried up and building, labor and other costs soared.

Issuance during July hit $53.388 billion, a 28.8% increase from $41.466 billion last year. This is the fourth consecutive month where issuance topped $50 billion.

Issuance year-to-date is at $336.257 billion, up 17.1% from $287.074 billion over the same period in 2024.

The heavy supply contrasts with past years, where July tends to be a slower month, said Tom Kozlik, head of public policy and municipal strategy at HilltopSecurities. 

In a normal year, issuance picks up in May and June, falls in July, then starts ramping up again in August, he said. The slump is driven by summer vacation schedules and the Federal Reserve meeting calendar, which Kozlik said both tend to slow volume.

But this July exceeded expectations. Even the weeks of the July Fourth holiday and the Federal Open Market Committee meeting were “massive,” Kozlik said.

Additionally, market participants last month continued to pull deals forward to combat the uncertainty surrounding the impact of the One Big Beautiful Bill, which left the tax exemption intact, though some were concerned about its potential elimination from the start of the year, said Peter Delahunt of StoneX.

There also continued to be demand from issuers for more funding to meet their needs as they lost “government largesse,” either from the drying of pandemic-era aid or government cuts across the board, he said.

There were many sizable deals in July, including the $3.4 billion Georgia public-private partnership deal, the largest deal year-to-date, which came to market during the last week of the month.

Part of the reason for these large deals is that things are more expensive, “whether it’s the cost of money to borrow or the cost of supplies to build,” Delahunt said.

“We can blame inflation, to a degree, but the cost to build new schools, roads, or other capital projects has increased significantly since pre-pandemic,” said MacKay Municipal Managers client portfolio managers Eric Kazatsky and Eric Snyder.

There is also the drying up of pandemic-era stimulus, which once was boosting borrower balance sheets and kept supply lower for a few years. Issuers, though, need to “get back into the schedule of financing projects that keep infrastructure in good repair,” they said.

Infrastructure needs are not going away, as the American Society of Civil Engineers said in its 2025 Report Card for American Infrastructure, that the infrastructure funding gap in the country between 2024 and 2033 is $3.7 trillion.

Demand has largely kept up with the record supply seen since the start of the year, Kozlik said. But cracks are beginning to emerge.

“Demand has been there,” he said. “But, especially over the last couple of months, there have been some times where it has been a little more difficult for the market to digest all this issuance.”

That has created opportunities for crossover buyers and retail investors to take advantage of higher yields, as institutional investors struggle to keep up with successive, massive months, he said.

July issuance details
Tax-exempt issuance rose 32.9% to $48.229 billion in 716 issues from $36.296 billion in 608 issues a year ago. Taxable issuance dropped 25.3% to $2.379 billion in 55 issues from $3.185 billion in 62 issues in 2024. AMT issuance was $2.78 billion, up 40% from $1.985 billion in 2024.

New-money issuance surged 74.1% to $45.726 billion from $26.262 billion, while refundings fell 67.2% to $3.226 billion from $9.827 billion.

Revenue bond issuance increased 6.5% to $31.968 billion from $30.019 billion in July 2024, and general obligation bond sales rose 87.1% to $21.42 billion from $11.448 billion in 2024.

Negotiated deal volume was up 26.6% to $42.415 billion from $33.509 billion a year prior. Competitive sales rose 59.1% to $10.888 billion from $6.842 billion in 2024.

Bond insurance rose 40.9% to $3.765 billion from $2.673 billion.

Bank-qualified issuance increased 22.5% to $717.7 million in 180 deals from $585.9 million in 160 deals a year prior.

California claimed the top spot year-to-date among states.

Issuers in the Golden State accounted for $51.652 billion, up 21.3% year-over-year. Texas was second with $43.808 billion, up 10.2%. New York was third with $ 37.264 billion, up 9.9%, followed by Florida in fourth with $12.491 billion, down 15.8%, and Wisconsin in fifth with $12.294 billion, a 73.1% increase from 2024.

Rounding out the top 10: Pennsylvania with $10.161 billion, up 63.9%; Massachusetts with $9.975 billion, down 2.7%; Washington with $8.922 billion, up 5.3%; Colorado with $8.389 billion, up 48.1% and Michigan with $8.06 billion, up 54.2%.