November 5, 2014 / 2:55 PM / 5 years ago

Trading of U.S. municipal bonds plummets in 3rd qtr -MSRB

WASHINGTON, Nov 5 (Reuters) - Trading of U.S. municipal bonds seized up in the third quarter, with the number of trades down 25.4 percent from a year earlier and the total par amount falling 18.6 percent from the third quarter of 2013, according to data released by the Municipal Securities Rulemaking Board on Wednesday.

Trading was also down from the previous quarter, falling 9.1 percent measured by dollar amount and 2.3 percent measured by how many times debt changed hands.

Altogether, $671.8 billion of bonds changed hands in 2.19 million trades, the board found using its central trade reporting system, Electronic Municipal Market Access.

Both the primary and secondary markets have slowed in 2014 from last year, with issuance running 6.1 percent below 2013 volume. A record-setting Puerto Rico junk deal provided traders in the $3.7 trillion municipal market with some fodder early in the year and dominated the first half of the year.

Buying in the secondary market especially fell off during the third quarter, with the average daily par amount of purchases dropping to $5.2 billion from $6.2 billion in the third quarter of 2013.

In the third quarter, though, Texas tax notes maturing in 2015 were the most traded by par amount and New York City Water Finance Authority revenue bonds saw the highest number of trades. (Reporting by Lisa Lambert; Editing by James Dalgleish)

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