Long-term municipal issuance volume, including taxable and tax-exempt issuance, totaled $113.1 billion in the second quarter of 2012 according to Thomson Reuters, a 44.8 percent and 70.1 percent increase, respectively, quarter-over-quarter ($78.1 billion) and year-over-year ($66.5 billion). Refundings as a percentage of issuance continued to stay elevated in the second quarter as issuers sought to take advantage of low rates, with approximately 62.5 percent of issuance in 2Q’12 derived from refundings, having abated slightly from the 66.7 percent in 1Q’12 but well above 48.9 percent in 2Q’11. Year-to-date, municipal issuance totaled $191.2 billion, a smidge shy of the 10-year average ($194.3 billion year-to-date).

Tax-exempt issuance totaled $103.4 billion in 2Q’12, an increase of 44.9 percent and 83.6 percent, respectively, from 1Q’12 ($71.3 billion) and 2Q’11 ($56.3 billion). AMT issuance totaled $3.4 billion in 2Q’12, double the amount from 1Q’12 ($1.1 billion) and an increase of 44.7 percent from 2Q’11 ($2.4 billion.). Taxable issuance increased to $6.6 billion in 2Q’12, an increase of 14.6 percent from 1Q’12 ($5.7 billion) but a decline of 16.8 percent from 1Q’11 ($7.9 billion), when several Congressionally-authorized taxable bond programs were active.

By use of proceeds, general purpose led issuance totals in 2Q’12 ($32.4 billion), followed by primary & secondary education ($17.3 billion), water and sewer facilities ($12.0 billion), and hospital ($10.8 billion), although a significant portion were refundings, rather than new money issues.

Year to date, sectors that saw a high percentage of new money proceeds were student loans (98.7 percent of 1H’12 issuance); multi-family housing (86.0 percent), gas (92.5 percent), industrial development (95.7 percent), and bridges (all issuance).

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, highlights and commentary are included.

Credits

SIFMA Research

• Managing Director, Director of Research: Kyle Brandon
• Director, Research: Sharon Sung
• Municipal ULF Intern: Anthony Aquino
• Municipal ULF Intern: Carrie Chan

Municipal Division

• Managing Director, Associate General Counsel, Co-Head: Leslie Norwood
• Managing Director, Associate General Counsel: David Cohen
• Managing Director, Co-Head: Michael Decker