MSRB Fact Book reports municipal trading volume dropped 13% in 2015

By Wendy Van Sickle

Columbus, Ohio, March 3 – The Municipal Securities Rulemaking Board reported in its annual Fact Book that overall municipal bond trading volume declined to $2.42 trillion in 2015, down 13% from 2014.

Municipal securities trading volume has declined every year since its high of $6.7 trillion in 2007, according to a Thursday press release announcing publication of the Fact Book.

The majority of 2015’s decrease can be attributed to a nearly 40% decline in trading volume in the municipal variable-rate market, the MSRB said. Par amount traded of fixed-rate municipal securities in 2015 increased slightly from 2014.

Despite the decrease in overall par amount traded since 2007, the number of municipal securities trades continues to be stable with 9.26 million trades in 2015, an increase from the 8.91 million trades in 2014.

The Fact Book provides comprehensive and historical statistics on municipal market trading patterns, the number and type of continuing and primary market disclosure in the municipal securities market as well as interest rate resets for municipal variable-rate securities.

The newly published Fact Book reports that

• In terms of most-active securities, Puerto Rico’s 8% 2035 bond took the top spot with trading volume of $7.48 billion in 2015;

• Measured by the number of trades, the most active security in 2015 was the New Jersey Transportation Trust Fund Authority 4.25% 2044 bond, which changed hands 6,741 times;

• Customer trades (purchase and sales) of municipal bonds as a percentage of all trades decreased to 77% in 2015 from 84% in 2011, while interdealer trades have increased every year since 2011 when such trades accounted for 16% of the overall market, compared with 24% in 2015; and

• The number of continuing disclosure documents submitted by issuers of municipal securities declined 6% in 2015, but the overall level of submissions remains substantially higher than 2011-2013 levels.

Data in the Fact Book is based on information submitted by municipal securities dealers, issuers and those acting on their behalf.

This year’s Fact Book for the first time separates trading data on fixed-rate and variable-rate bonds.

MSRB is a Washington, D.C.-based self-regulatory organization.

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