The Muni Opportunity

9 snips

Aug 27, 2025

In this discussion, Jamie Iselin, Head of Municipal Fixed Income at Neuberger Berman, dives into the dynamic world of municipal bonds. He reveals how recent tax initiatives and infrastructure needs have driven a surge in supply, outpacing demand. Iselin highlights the appeal of munis for global investors seeking tax-advantaged yields, while also addressing the complexities brought on by political shifts. The conversation uncovers opportunities within the $4 trillion municipal market, focusing on public-private partnerships and the growing interest from international buyers.

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INSIGHT

Tax Exemption Preserved Eased Markets

The OBBBA bill preserved the muni tax exemption, calming a market that feared elimination earlier in the year.
That clarity sparked a muni rally and eased investor skittishness across several sectors.

INSIGHT

SALT Cap Won’t Dent High-State Demand

The SALT cap increase is small and won’t materially lower muni demand in high-tax states like NY, CA, and NJ.
High effective state tax rates will keep demand for tax-exempt munis elevated in those states.

ADVICE

Prefer Bigger Health Systems For Resilience

Favor larger health systems and multi-state hospital networks for credit resilience amid Medicaid reform risk.
Prioritize issuers with stronger balance sheets and financial flexibility to withstand policy-driven revenue shifts.

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Municipal bonds have been one of the more active corners of the fixed income market this year. Near-record levels of new issuance have outpaced demand amid uncertainties stemming from shifts in the policy landscape. While institutional investors have long turned to munis for tax-advantaged yields and portfolio diversification benefits, the surge in supply puts the onus on buyers to be selective. Government initiatives and infrastructure funding needs are fueling supply growth, creating opportunities across some sectors and highlighting how the resilient credit quality of muni bonds can add to their appeal to global investors.

On this episode of Disruptive Forces, host Anu Rajakumar sits with Jamie Iselin, Head of Municipal Fixed Income, to demystify the contrasting dynamics of the municipal bond market and its expanding role in portfolios. Together, they unpack new policy developments, trends in public-private partnerships, and practical perspectives for investors seeking access to this dynamic asset class.

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