Municipal bond volume growth slowed perceptibly last month, but the dollar value of bonds through August was still 42% higher than for the same period last year, at $150.78 billion compared with $105.87 billion, according to figures compiled by Securities Data Co.
Bond volume in August, at $18.99 billion, was only 6% higher than August 1991's $17.92 billion. Last month, new-money issues fell to $8.11 billion, off 38% from the year-ago period's $13.06 billion. However, refundings continued to be sold at a torrid pace, jumping 124%, to $10.88 billion from $4.87 billion.
New money has cooled through the first eight months, rising only 2%, to $79.89 billion from $78.03 billion. Refundings, on the other hand, were still skyrocketing at $70.89 billion, a 155% increase from $27.84 billion last year. Refundings now account for 47% of all new issues so far this year.
Further, the $70.89 billion is already the highest yearly total for refundings, passing the previous record of $70.77 billion set in 1985.
In August, 20 of the 50 largest issues were for refundings, while eight others in the group were combined refunding and new-money deals. Last month's two largest issues were refundings: $1.17 billion of New York City general obligation bonds and $1.04 billion of New York City Municipal Water Finance Authority water and sewer bonds.
Although the dollar amount for August was the second highest for that month, the 651 issues sold was the lowest number since January 1991's 625 issues. However, dollar volume that month was only $7.83 billion.
The highest dollar amount for August occurred in 1986, when issuers rush $30.87 billion to market to beat the Sept. 1 effective date for the Tax Reform Act of 1986.
Bond financing has risen this year for every purpose category. General purpose and multipurpose issues, the largest category, posted a 45% rise through August, to $40.88 billion from $28.14 billion.
Education, the largest specific purpose for tax-exempt bonding, jumped 45% through August, to $27.22 billion from $18.82 billion a year ago. Transportation bond sales more than doubled, to $17.41 billion from $8.42 billion a year ago, an increase of 107%. Bonds sold for roads and highways soared to, $8.54 billion from $3.03 billion last year, a jump of 181%. Airport financing jumped 106%, to $4.44 billion from $2.16 billion.
Utilities rose 50%, to $17.37 billion from $11.6 billion.
Health-care volume rose 12%, to $13.73 billion; housing was up 34%, to $10.8 billion; electric power jumped 66%, to $9.51 billion; and industrial development increased 42%, to $4.63 billion.
Environmental facilities and public facilities were the only sectors to decline in the first eight months of 1992. Environmental issues declined 3%, to $4.25 billion from $4.439 billion, and public facilities were also off 3%, to $4.98 billion from $5.16 billion.
Negotiated offerings surged 54%, to $117.24 billion from $76.28 billion, while competitively bid sales rose 15%, to $32.02 billion from $27.8 billion. Private placements fell 15%, to $1.52 billion from $1.79 billion.
Bonds subject to the alternative minimum tax posted a 27% gain, to $9.88 billion from $7.81 billion, because of increases in single-family mortgage bonds and airport revenue bonds. Taxable deals decreased 5%, to $2.68 billion from $2.81 billion.
General obligation issues surged 55%, to $56.61 billion from $36.66 billion last year, and increased their share of the market to 38% from 35%. Revenue bond sales were up 36%, to $94.17 billion from $69.31 billion.
The use of bond insurance to enhance municipals soared 51%, to $51.25 billion from $33.89 billion. This year's total already is the second highest annual figure for insured bonds, exceeded only by last year's $51.53 billion.
Bonds secured by insured mortgages or collateralized by mortgage securities rose 9%, to $3.22 billion from $2.96 billion. Bonds backed by bank letters of credit dropped 17%, to $4.56 billion, despite a 34% jump in variable-rate financing, to $9.02 billion.
State government issues rose 47%, to $16.78 billion, and state agency sales jumped 55%, to $40.99 billion. Bonds sold by local municipalities rose 44%, to $66.44 billion, and local authority sales posted a 39% increase, to $26.57 billion. Bonds sold by public universities and colleges declined 6%, to $2.43 billion.
California issuers continued to be the most active, bringing $17.37 billion to the markets, up 5% from $16.54 billion the year before. New York was second, with a 16% increase to $13.72 billion; followed by Texas, up 50% to $12.01 billion; Florida, up 69% to $9.98 billion; and Pennsylvania, up 29% to $8.38 billion.
Securities Data's figures are preliminary and subject to substantial revision. July's bond volume, for example, was revised to $17.41 billion, up $1.64 billion from the $15.77 billion initially reported.
