Sales of new municipal bonds plunged in September to $7.69 billion, the lowest level in more than four years, according to figures compiled from Securities Data Co.

That left new-issue volume for the year to date at $126.24 billion, 44% below the $223.46 billion figure for the same period in 1993 and the lowest three-quarter total since 1991.

September's $7.69 billion volume was the lowest for a single month since February 1990, when $6.88 billion was marketed, and the lowest for September since 1987, when $5.96 billion was sold. Last month's total was 68% below the $24.04 billion sold in September 1993.

Only 584 issues were brought to market last month, less than half the 1,200 issues marketed in September 1993 and the fewest for any month since January 1990, when 549 issues were sold.

Refunding issuance remains the key factor behind this year's slump in new-issue sales. Only $1.58 billion of refunding bonds were sold in September, roughly one-12th of last September's $13.09 billion figure. That raised this year's refunding total to $33.41 billion, fully 71% below the $116.75 billion for the same period a year ago. Issues combining new-money and refunding bonds have suffered a similar decline, plunging 74% to $9.05 billion for the first nine months from $34.39 billion a year ago.

New-money financing also dropped in September, falling 34% to $5.94 billion from $8.99 billion a year ago. For the year to date, new-money issuance remains 16% ahead of 1993's pace, rising to $83.78 billion from $72.32 billion.

Municipal financing has risen this year for only two general purpose categories: housing, which is up 13%, to $11.25 billion from $9.95 billion, and industrial development, which is up 15%, to $5.39 billion from $4.67 billion. All other categories, such as education, transportation, and utilities, have posted declines ranging from 24% to 83%.

Competitive bond sales inched up 1% in the first nine months, to $41.07 billion from $40.57 billion, but negotiated bond sales plunged 54%, to $84.02 billion from $181.08 billion.

The use of bond insurance declined in tandem with overall volume, with the volume of insured issues falling 44%, to $46.81 billion, or 37.1% of the overall total, from $83.79 billion and a 37.5% share the previous year. Bond sales backed by bank letters of credit declined by a similar 43%, to $4.01 billion from $7.04 billion. The use of insured mortgages or collateralization with mortgage securities, however, rose 30%, to $3.12 billion from $2.41 billion, in keeping with the increase in housing bond sales.

Taxable municipal bond sales dropped 19% in the first nine months of 1994, to $5.14 billion from $6.36 billion a year ago. Issues subject to the alternative minimum tax for individuals, however, rose 24%, to $11.78 billion from $9.49 billion; most of these issues are sold for housing and airport projects.

California issuers were the busiest among the 50 states during the first nine months of 1994, selling 590 issues totaling $20.05 billion, even though that was down 32% from their $29.33 billion figure for the previous year. California was followed by New York, down 31% to $14.06 billion; Texas, down 33% to $8.52 billion; Pennsylvania, down 44% to $6.74 billion; Florida, down 55% to $6.6 billion. Only seven states posted increases in new-issue sales over the same period in 1993, and four of those were less than 1%.

The Bond Buyer compiled the new-issue volume figures from Securities Data's data base on Friday, Sept. 30. They are preliminary and subject to possibly considerable revision. The long-term bond figures are based on issues maturing in 13 months or longer. Private placements and municipal forward sales are included, but taxable debt issued directly by private non-profit organizations and municipal remarketings are excluded.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.