Total housing bond issuance for the first half of 1993 plummeted 41.6%, to $6.1 billion from the $10.4 billion sold in the same period year, according to Securities Data Co.
Lobbyists attributed the drop to the inability to issue new-money mortgage revenue bonds.
Mortgage bond issuance, by itself, totaled $3.5 billion, down 55.4% from the $7.9 billion issued in the same period a year ago. Because the tax exemption for mortgage revenue bonds expired on June 30, l992, the $3.5 billion figure includes only refundings, remarketings, and taxable deals.
Multifamily housing bond issuance, which was not affected by the termination date, was virtually unchanged from a year ago, with $2.56 billion issued in the first six months of 1993, compared with $2.52 billion in the first half of last' year.
HOUSINGSenior Managers VolumeManager ($ mils.) 1 Goldman Sachs $1,796 2 Bear Stearns 824 3 Merrill Lynch 571 4 First Boston 388 5 PaineWebber 324 6 Morgan Stanley 227 7 Craigie 191 8 Newman 189 9 George K. Baum 13310 Miller & Schroeder 126Issues for nursing home and life-carecommunities, private placements, short-termnotes, remarketings, and taxable debtissued by private nonprofit organizations areexcluded. Source: Securities Data Co.
Reflecting the need to find alternative ways to issue mortgage bonds, total taxable housing bond issuance skyrocketed by 379.5%, to $1.5 billion from $316 million in the first half of 1992. The number of deals in the first six months of 1993 was 91, compared with 61 in the same period a year ago.
The sharp drop in issuance of tax-exempt mortgage bonds also partly reflects the inflated level of issuance last year, when issuers rushed to beat the June 30, 1992 termination date. The. $7.9 billion issued in the first half of last year compares with $4.1 billion sold in the first half of 1991.
"The tragedy of this stop-start business is precisely documented in these numbers," said John T. McEvoy, executive director of the National Council of State Housing Agencies.
The on-again, off-again nature of the mortgage revenue bond exemption "absolutely destroys sensible. market timing and produces inestimable new costs for people who need those mortgages," McEvoy said. "You can't just turn on the MRB faucet and turn it off as if it made no difference to anybody."
The total number of housing bond deals in the first six months of this year fell to 305 from 430 in the first six months of 1992. Mortgage bond deals in the first half of 1993 totaled 229, down from 239 the previous year. The number of multifamily deals dropped to 76, from 191 a year ago.
Issuance by state housing agencies in the first half of 1993 dropped by 46.8%, to $4.4 billion from $8.2 billion a year ago. The number of issues dropped to 92 from 217.
Local housing authorities saw housing bond volume decline to $1.2 million from $1.4 million a year ago, a 13.9% decline. The number of deals rose slightly, however, to 157 from 151.
Issuance of housing bonds subject to the alternative minimum tax fell 85.6%, to 9 deals totaling $541 million from 94 deals totaling $3.7 billion in the first six months of 1992.
Variable-rate housing bond issues fell to $1.2 billion in the first half of 1993, a 67.1% drop from the $3.6 billion issued last year. The number of issues dropped to 46 from 111.
The amount of housing bonds issued as bank-qualified debt decreased 45.8%, to $25.8 million from $47.6 million in the year earlier period. The number of issues also fell, to 7 from 18.
Issuance of mortgage-backed bonds experienced a sharp 83.8% drop, to $657 million in the first half of 1993 from $4.1 billion a year ago. But the number of issues fell less sharply, to 122 from 144.
The use of both bond insurance and letters of credit rose in the first six months of 1993. Insured issues increased 60.7%, to $502.4 million from $312.6 million. Issues backed by letters of credit rose 47.2%, to $354.1 million from $240.5 million. The number of letter-of-credit issues decreased a notch, to 24 from 25.
Goldman, Sachs & Co. retained the position it held last year as top senior manager, managing a total of $1.8 billion in housing bond issues. Bear, Stearns & Co. served as senior manager on $824.3 million of housing bond delays, to place second.
Merrill Lynch & Co., the top senior manager of the first half of 1991, placed third, managing $571.1 million during the first six months of this year.