Municipal trading volume reaches $825 billion in Q3, MSRB says

By Angela McDaniels

Tacoma, Wash., Nov. 12 - Investors traded $825 billion principal amount of municipal securities during the third quarter, according to third-quarter statistics released by the Municipal Securities Rulemaking Board.

The amount traded is a 4% increase from the amount traded in the third quarter of 2012.

The total number of trades increased 23% to 2.93 million in the third quarter from the prior-year quarter.

MSRB said the combination of a small increase in par amount traded and the significantly higher number of trades decreased the average trade size to $281,833 in the third quarter, a 16% decrease from the same quarter of 2012. The lower average trade size is typically an indication of retail participation due to the larger number of smaller trades, MSRB said.

While trading activity increased overall, transactions involving variable-rate securities decreased both in terms of par amount and number of trades. The par amount traded decreased to $254 billion in the second quarter of 2013 from $292 billion in the same quarter of 2012, and the number of trades decreased 3% to 49,222.

Trading of revenue securities accounted for about 70% of the total par amount traded and 66% of the number of trades in the third quarter. General obligation bonds accounted for 22% and 31% of trading activity by par amount and number of trades in the third quarter, respectively.

Most active by amount

The following securities were the top five most-active securities during the third quarter by par amount:

• Puerto Rico Sales Tax Financing Corp.'s series 2007A sales tax revenue bonds due Aug. 1, 2054. Investors traded $8.05 billion principal amount of these bonds in 806 trades;

• The State of Texas' series 2012 tax and revenue anticipation notes due Oct. 28, 2014. Investors traded $6.9 billion principal amount of these bonds in 128 trades;

• The State of California's series 2013-14-A2 revenue anticipation notes due June 23, 2014. Investors traded $6.44 billion principal amount of these bonds in 1,692 trades;

• Texas' series 2012 tax and revenue anticipation notes due Aug. 30, 2013. Investors traded $5.72 billion principal amount of these bonds in 126 trades; and

• The series A Exxon Mobil project revenue bonds due Aug. 1, 2035 issued by the East Baton Rouge Parish Industrial Development Board of Louisiana. Investors traded $3.28 billion principal amount of these bonds in 152 trades.

Most active by trades

The following securities were the top five most-active securities during the second quarter by number of trades:

• The series 2013A water and sewer revenue bonds due Dec. 1, 2043 issued by Pennsylvania's Lehigh County Authority for the City of Allentown. Investors traded $506.1 million principal amount of these notes in 4,290 trades;

• South Carolina Public Service Authority's series 2013B revenue bonds due Dec. 1, 2043. Investors traded $767.8 million principal amount of these bonds in 3,391 trades;

• The series 2007A revenue bonds due June 1, 2037 issued by Louisiana's St. Jon Baptist Parish for Marathon Oil Corp. Investors traded $537.6 million principal amount of these bonds in 3,341 trades;

• The New Jersey State Turnpike Authority's series 2013A turnpike revenue bonds due Jan. 1, 2043. Investors traded $485.3 million principal amount of these bonds in 2,352 trades; and

• The toll revenue bonds due April 1, 2053 (38611TAD9) issued by Texas' Grant Parkway Transportation Corp. Investors traded $1.36 billion principal amount of these bonds in 2,224 trades.

Daily averages

The average principal amount of securities traded each day was $13.1 billion in the third quarter.

Of the $13.1 billion average amount traded each day during the third quarter, $9.05 billion was traded in amounts of more than $2 million, the most of any category.

The average daily number of trades was 46,489 during the third quarter. The greatest amount of this average, 24,839 trades, was in the category of $25,000 or less.

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