US Municipal Credit Report, 2012 Q4 and Full Year

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.

Summary

According to Thomson Reuters, long-term municipal issuance volume, including taxable and tax-exempt issuance, totaled $91.3 billion in the fourth quarter of 2012, an increase of 9.3 percent from the prior quarter ($83.6 billion) but a decline of 0.6 percent year-over-year (y-o-y). For the full year 2012, municipal issuance totaled $366.7 billion, just shy of the 10-year average ($381.3 billion) and at levels last seen in 2003 ($378.5 billion).

Tax-exempt issuance totaled $79.4 billion in 4Q'12, a 16.9 percent increase quarter-over-quarter ($80.9 billion) but a decline of 1.9 percent y-o-y ($67.9 billion). For the full year 2012, tax-exempt issuance reached $321.9 billion, representing 87.8 percent of all issuance, similar in proportion to 2011 (86.2 percent). AMT issuance totaled $3.6 billion in 4Q'12, a decline of 26.9 percent q-o-q but an increase of 54.4 percent y-o-y. For the full year 2012, AMT issuance was $13.0 billion, an increase of 61.1 percent from 2011. Taxable issuance was $8.7 billion in 4Q'12, a decline of 19.5 percent q-o-q but unchanged y-o-y. For the full year 2012, taxable issuance was $31.8 billion, also similarly unchanged from the full year 2011.

By use of proceeds, general purpose led issuance totals in 4Q'12 ($24.2 billion), followed by primary & secondary education ($13.6 billion), and water & sewer facilities ($7.3 billion). For the full year 2012, general purpose also led totals ($99.3 billion), followed by primary & secondary education ($58.3 billion) and water & sewer facilities ($39.2 billion).

Refundings remained elevated in the fourth quarter, but declined slightly as a percentage of issuance (57.3 percent) compared to 3Q'12 (59.5 percent), but still above 4Q'11 (47.8 percent). For the full year, refundings represented 61.5 percent by dollar amount, a new high.