The reason for the unexpected, historic decline in volume appears to be a very strong political reaction to the status quo. The result of this reaction has been for issuers to bring financing of new and existing infrastructure to a standstill.
Factors considered in our new estimate:
The run rate of the first four months, which annualizes to under $200 billion, a level not seen in more than a decade
The strong tendency for second half volume to be stronger than the first half
The significant decline in muni yields
The possibility of Congressional action to limit tax-exempt financing
We are revising our estimate for 2011 municipal bond volume, taking into account the substantial decline in volume.
Revised Municipal Bond Volume Forecast for 2011 (PDF) »
Factors considered in our new estimate: