Taxable Muni-Bond Sales Surge as Window Opens for Refinancings

A window of opportunity has led state and local governments to flood the muni-bond market with refinancings.

State and local governments issued $11 billion of refunding bonds in September, nearly matching the $12.9 billion sold in August when rates fell to record lows. More than a third of the sales during the past two months were taxable debt, showing that rates have fallen so much that states and cities can still capture lower borrowing costs even though President Donald Trump’s tax cut law bars sales of tax-exempt debt for a key type of refinancing.

It’s unusual for state and local ...