(Bloomberg) -- Strategists at the municipal-bond market’s biggest underwriter are forecasting a very busy year for state and local government debt bankers.

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Bank of America Corp analysts led by Yingchen Li and Ian Rogow anticipate state and local governments will sell $520 billion of debt in 2025, a record sum, the group said in a research note on Friday. The strategists also revised their forecast for this year to $460 billion from $400 billion.

“Positive factors for munis remain in place,” they wrote, citing “well-controlled muni/Treasury ratios and compressing muni credit spreads.”

This is despite anticipated volatility in the market due to economic data and the US elections.

“The labor market’s strength and not-so-benign inflation readings for September continue to reverberate through the bond market’s repricing,” the strategists said in the note. “A volatile rates environment may persist through the month-end.”

So far, issuance this year has proved to be strong at $409 billion, a 43% increase from the prior year, according to data compiled by Bloomberg. If debt sales top $500 billion in 2025, it would be the first time at that level since at least 2013.

BofA expects $480 billion in principal redemptions and $160 billion of coupon payments next year.

--With assistance from Amanda Albright.

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