Analyzing state-wide issuance trends
In the last section we discussed municipal bond (MUB) issuance in Q1 2014 in terms of municipal bond features such as refunding versus new capital issues and taxable versus tax-exempt issues. In this section, we will analyze state-wide issuance trends. The figures mentioned in the article exclude private placement deals.
Texas tops municipal bond issuance in Q1 2014
Texas led the long-term municipal bond issuance tables in Q1 2014, with about ~$8.8 billion worth of bonds issued. Approximately $5.5 billion of those were revenue bonds (RVNU) with the balance issued as General Obligation (or GO) bonds; ~$7.9 billion worth of bond issues were tax-exempt, ~$204 million were AMT issues and the rest were taxable issues. The largest issue was the Texas Transportation Commission’s $1.46 billion revenue bond issue. Piper Jaffray (PJC) was the lead underwriter for the AAA-rated issue.
New York was the second largest issuer by state, with ~$7.9 billion worth of debt issued in Q1 2014; ~$6 billion of that was by way of revenue bonds with the balance issued as GO bonds, and ~$6.6 billion of the issuance was also tax-exempt (TFI). The largest issue in Q1 was the New York and New Jersey Port Authority’s $1 billion taxable issue in January. The issue was underwritten by Bank of America Merrill Lynch.
California ranked number three in terms of long-term muni bond issues in Q1 2014, with ~$7.3 billion. The split between revenue and GO bonds was almost equal. ~$6.5 billion of the debt was tax-free, the balance composed of AMT and taxable debt. The largest debt issue was the State of California’s $1.79 billion tax-exempt GO offering maturing in December 2043, which was priced to yield 4.22%. The issue was underwritten by Bank of America Merrill Lynch.
As mentioned earlier in this series, the single largest municipal offering in Q1 2014 was the Commonwealth of Puerto Rico’s $3.5 billion GO issue in March. Citigroup (C) topped the underwriter’s league tables in the quarter with 75 deals worth over $8.1 billion, cornering 13.5% of the market share. Bank of America Merrill Lynch and J.P. Morgan (JPM) featured in the list, taking the #2 and #3 slots, respectively.
In the next part of this series, we will discuss issuance in terms of call features.