WASHINGTON Feb 28 Trading in U.S. municipal
bonds dipped last year as appetite for revenue bonds faded for a
second year in a row, according to data released on Thursday by
the Municipal Securities Rulemaking Board.
Altogether, $3.23 trillion in bonds was traded in 2012,
compared with $3.29 trillion in 2011. Both totals marked a major
drop from previous years - $3.75 trillion were traded in 2010
and $3.8 trillion in 2009, MSRB said.
The MSRB, a self regulatory organization, wrote in its
year-end report that revenue bonds make up a little less than
two-thirds of trades, when measured by par amount, on average,
and in 2012 $2.11 trillion was bought and sold. That compares to
$2.12 trillion in 2011 and $2.5 trillion in 2010.
General obligation debt, meanwhile, rose to $731.5 billion
trades from $704.03 billion in 2011.
The $3.7 trillion municipal bond market is largely
considered "buy and hold." Of the trade types, $1.62 trillion
were customers buying debt, nearly twice the $975 billion of
customers selling debt. Both were slightly below 2011's buys of
$1.67 trillion and sales of $1.09 trillion. Inter-dealer trades,
meanwhile, rose to $630.55 billion from $526.3 billion in 2011.
In 2012, an average bond was traded 1.57 million times
within a month of issuance. Three to six months from issuance,
it was traded just 232,744 times. A year to 18 months out the
number of trades averaged 307,877.
When measured by the number of trades, total activity
dropped in 2012 as well, with 9.71 million transactions compared
to 10.4 million in 2011.
Bonds issued by Puerto Rico for general obligation, sewer
and water, and revenues were the top four most actively traded
securities in 2012, when measured by number of trades. Illinois
When measured by par amount, variable-rate East Baton Rouge
development bonds were the two most traded, followed by short
term debt issued by California.