Led by a surge of refunding issues primed by this year's drop in interest rates, issuance of education bonds increased during the first three quarters of 1993 to $37.34 billion -- a 24.9% jump over the $29.9 billion of school debt sold in same period of 1992.

If the trend continues, the volume for the full year would be an unprecedented $49.79 billion, far ahead of the record $39.8 billion reached last year.

Despite this year's record pace, there was a small falloff in volume between the second and third quarters. During the third quarter, education issuance was $13.16 billion compared with $15.07 billion in the second quarter.

"The level of refundings has been tremendous -- but volume has also been driven in a big way by the upgrading of technology-based teaching," said Paul R. Stauder. Stauder is first vice president of Stauder, Barch & Associates, an Ann Arbor, Mich.-based financial advisory firm that focuses on education issuers.

Stauder said he expects the high level of issuance to continue through the remainder of the year and into 1993. "We just see a lot of deals in the pipeline," he said.

Refunding debt -- which accounted for 61.8% of the total over the first three quarters of 1993 -- jumped by 59.6% to $23.06 million. New-money issuance, however, dropped by 7.7% to $15.46 million.

Education has been the leading type of municipal financing in 1993, with 16.8% of the total $221.68 billion issues through September.

Merrill Lynch & Co., which was third among underwriters of education debt in 1992, topped the list through the first three quarters. The firm was lead manager on 66 deals totaling $4.06 billion for a 10.9% market share. Smith Barney Shearson, which was first last year, dropped to second with 76 issues totaling $2.8 billion, or 7.6%, of education issues. Goldman, Sachs & Co., fifteenth in 1992, jumped to third place with $1.8 billion, or a 4.9% share.

Public Financial Management was the leading financial adviser to issuers of school debt. The firm handled 78 issues totaling $1.32 billion, for a 3.5% market share. Public Resources Advisory Group was second with 10 deals totaling $1.11 billion; and Stauder Barch & Associates was third, with 83 issues totaling $973.9 million.

Among bond counsel firms, Mudge, Rose, Guthrie, Alexander & Ferdon led the pack with its 7.6% share. Squire, Sanders & Dempsey was second with 55 deals totaling $2.3 billion, followed by Orrick, Herrington & Sutcliffe, with 45 issues totaling $2.07 billion.

Education issuers in Texas led those in all other states with $3.39 billion of bonds, 9.1% of the total. New York issuers followed closely with $3.38 billion, also a 9.1% share. California issuers ranked third, with $2.98 billion, or an 8% share.

When categorized by purpose, bonds sold to finance higher education showed the largest increase, rising 45.8% to $10.15 billion. Bonds sold to finance primary education rose 17.9% to $22.59 billion, while student loan bond issues rose 21.4% to $4.46 billion.

Negotiated sales rose by 26.5% to $26.5 billion, accounting for 71% of the total, as opposed to a 70. 1 % share last year. Revenue debt increased by 40.3% to $18.16 billion, while general obligation debt rose 13. 1 % to $19.18 billion.

The use of insurance with education bonds rose by 22% to $14.6 billion, or 39.1% of the total, compared with 40% of the total last year.

Sales of variable-rate education debt rose 32.3% to $1.52 billion. The issues accounted for 4.1% of the total through September, as opposed to 3.9% in the same period of 1992.

The New York State Dormitory Authority led all issuers with $2.84 billion of education debt, or 7.6% of the total.

EDUCATIONSenior Managers Volume Manager ($1 mils.) 1 Merill Lynch $4,060 2 Smith Barney 2,803 3 Goldman Sachs 1,813 4 Morgan Stanley 1,794 5 Lehman Brothers 1,289 6 PaineWebber 1,131 7 A.G. Edwards 1,091 8 Kemper Securities 997 9 Seattle-Northwest 97710 Bank of America 915 Private placements, short-term notes, remarketings,and taxable debt issued by privateinstitutions are excluded. Source: SecuritiesData Co. (10/9/93)

ENVIRONMENTALSenior Managers Volume Manager ($1 mils.) 1 Goldman Sachs $2,324 2 Morgan Stanley 807 3 Smith Barney 674 4 Lehman Brothers 615 5 PaineWebber 404 6 Bear Stearns 318 7 J.P. Morgan 194 8 Merrill Lynch 190 9 Dillon Read 17210 First Chicago 168 Sanitary sewer issues, private placements,short-term notes, and remarketings are excluded.Source: Securities Data Co.

(10/9/93)HEALTH CARESenior Managers Volume Manager ($1 mils.) 1 Merrill Lynch $2,532 2 CS First Boston 2,115 3 Goldman Sachs 1,785 4 PaineWebber 1,709 5 Lehman Brothers 1,462 6 Bear Stearns 1,323 7 Morgan Stanley 1,243 8 Dillon Read 852 9 Ziegler Securities 70610 Alex Brown 689 Nursing home and life-care issues are included.Private placements, short-termnotes, remarketings, and taxable debt issuedby private nonprofit organizations areexcluded. Source: Securities Data Co.

(10/9/93)INDUSTRIAL DEVELOPMENTSenior Managers Volume Manager ($1 mils.) 1 Stone & Youngberg $510 2 Prudential Securities 357 3 Goldman Sachs 330 4 PaineWebber 235 5 Lehman Brothers 233 6 Merill Lynch 207 7 Smith Barney 190 8 Miller & Schroeder 138 9 Donaldson Lufkin 11410 Robert W. Baird 102 Issues for industrial and economic developmentare included. Private placements,short-term notes, and remarketings are excluded.Source: Securities Data Co.

(10/9/93)ELECTRIC POWERSenior Managers Volume Manager ($1 mils.) 1 Goldman Sachs $7,503 2 Smith Barney 3,947 3 CS First Boston 3,302 4 Lehman Brothers 2,713 5 Merrill Lynch 1,604 6 PaineWebber 1,577 7 Morgan Stanley 1,099 8 Donaldson Lufkin 907 9 Prudential Securities 58010 Bear Stearns 352 Combined utility issues, private placements,short-term notes, remarketings, andtaxable debt issued by private nonprofit cooperativesare excluded. Source: SecuritiesData Co. (10/9/93)

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