SAN FRANCISCO Nov 27 Seeking to expand its bond
business, brokerage Charles Schwab Corp says it will
give clients access to new issue municipal debt through Piper
The tie-up with the investment bank will substantially
increase muni bonds available to retail investors and advisers
using the brokerage's BondSource Web-based platform, Chad Jones,
a vice president at Schwab in Denver, said on Tuesday.
"We thought it was an important step in broadening our
overall access to municipal bonds," Jones said.
Minneapolis-headquartered Piper Jaffray last year served as
underwriter or financial adviser on 900 muni bond transactions
with a total par value of $52 billion, according to Schwab.
Piper Jaffray was not available to comment on the agreement
with San Francisco-based Schwab.
Jones said Piper Jaffray's presence in the Midwest will
expand muni debt opportunities for Schwab clients in that region
and they will also have increased access to smaller new muni
issues through the investment bank.
BondSource allows Schwab clients to buy new issue bonds as
well as debt on the secondary market and has traditionally been
strong in terms of California, New York, Texas and Florida muni
debt, Jones said.
Schwab clients over the twelve months ended in August had
access through BondSource to more than 930 new issue bond
offerings, including nearly 600 new issue muni deals.
While Schwab is best known as a discount stock brokerage, it
anticipates a growing market for muni debt propelled by high-net
worth individuals, retirees and investors approaching
retirement, Jones said.
Retail-level interest in muni debt, which many investors see
as a conservative investment with the added benefit of tax-free
payments, has been strong this year, underscored by net inflows
into municipal bond funds.
The funds, popular with retail investors, have posted net
outflows this year during only two periods - the weeks ended
April 11 and Oct. 31 - according to Lipper, a unit of Thomson