According to Thomson Reuters, long-term municipal issuance volume, including both taxable and tax-exempt issuance, totaled $93.4 billion in the third quarter of 2010, down 6.6 percent from $99.9 billion in 2Q’10 and a moderate increase of 1.9 percent from 3Q’09. Excluding taxables, tax-exempt issuance totaled $63.3 billion, a decline of 4.5 and 7.1 percent, respectively, from 2Q’10 and 3Q’09.

Market share in taxable issuance declined modestly in 3Q’10 from the prior quarter, a 30.4 percent share compared to 32.8 percent in 2Q’10; market share, however, remains well above last year, where taxable issuance took 25.4 percent market share in 3Q’09. The slight decline in market share was primarily due to the decline in Build America Bonds (BABs) issuance in 3Q’10, as non-BAB taxable issuance has remained steady at $7.8 billion in 3Q’10 (compared to $7.7 billion in 2Q’10).

Municipal bond prices rallied sharply in 3Q’10 for a total return of 3.7 percent for the quarter according to the Bank of America-Merrill Lynch Municipal Master Index; year-to-date municipals have returned 7.1 percent on a total-return basis.

About the Report

The municipal bond credit report is a quarterly report on the trends and statistics of U.S. municipal bond market, both taxable and tax-exempt. Issuance volumes, outstanding, credit spreads, rating changes, highlights and commentary are included.

Credits

SIFMA Research

• Managing Director, Director of Research: Kyle Brandon
• Research Analyst: Sharon Sung

Municipal Division

• Managing Director, Assistant General Counsel, Co-Head: Leslie Norwood
• Managing Director, Co-Head: Michael Decker
• Policy Analyst (Advocacy): Lynne Funk