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Southwest Finishes ’14 With a Flourish

In the fourth quarter of 2014, municipal bond issuers in the Southwest sold more than twice as much bond volume as they did in the same period of 2013. Total issuance of $64.7 billion for the year was the Southwest’s highest since 2010 and represented a 15% increase over 2013’s volume of $56.1 billion. The fourth-quarter surge followed a third quarter in which volume fell more than 22% year-over-year. With oil prices in the doldrums and a possible Federal Reserve rate hike looming, issuers are proceeding with caution in 2015.

JPMorgan came out on top among underwriters in the eight-state Southwest region in 2014, credited by Thomson Reuters with $8.35 billion of bonds, a better than 44% increase over 2013. It was JPM’s second consecutive year at the top. Bank of America Merrill Lynch & Co., the top underwriter in 2012, ranked second with $7.43 billion, followed by Citi at $5.99 billion, RBC Capital Markets at $4.97 billion, and Morgan Stanley at $4.73 billion. Among JPMorgan’s largest deals as senior manager was a $1.3 billion general obligation bond issue for the Texas Transportation Commission Oct. 2, with executive director Jaimie Scranton and managing director Marshall Crawford as lead bankers.

: First Southwest Co. maintained its perennial place atop the rankings of Southwest financial advisors in 2014 with deals valued at $14.7 billion, a 33% increase over 2013. Estrada Hinojosa & Co. retained second place with $8.75 billion, followed by RBC Capital Markets at $3.5 billion, Public Financial Management at $2.86 billion and BOSC at $2.5 billion. First Southwest Vice Chairman Michael Bartolotta was a key leader for First Southwest, along with managing director Drew Masterson, advising the city of Houston on its $2.5 billion of deals.

McCall, Parkhurst & Horton, the top bond counsel in the Southwest region in 2014, shares its Dallas headquarters with the accounting firm KPMG. McCall Parkhurst was credited by Thomson Reuters with $13 billion in deal volume, more than its two closest competitors –Andrews Kurth and Norton Rose Fulbright – combined. Bracewell & Giuliani ranked fourth with $5 billion, followed by Gilmore & Bell with $2.7 billion. McCall Parkhurst’s managing partner in Austin, Carol Polumbo carried a large share of the 2014 market with her work on issues from the Texas Transportation Commission.

The Arizona Transportation Board ranked first among issuers in the Grand Canyon State with $754 million of bonds in 2014. The Phoenix Civic Improvement Corp. was close behind with $725.7 million. Bank of America Merrill Lynch & Co. captured the top spot among underwriters with $1.047 billion, while Piper Jaffray’s $851.8 million took top spot among financial advisors. Squire, Patton & Boggs claimed the bond counsel crown with $2.053 billion, followed by Greenberg Traurig. Arizona’s $6.73 billion of volume represented a 39% increase over 2013.

The government of Arkansas ranked first among issuers in the state in 2014 with $371.5 million of bonds. The state is nearing completion of a major highway construction program. Crews & Associates led senior managers in the state with $548.2 million, while Stephens remained top financial advisor with $577 million. Friday Eldrege ranked first among bond counsel with $1.7 billion. Total bond issuance of $2.01 billion among all issuers in the state represented a 19% decline from 2013.

Colorado’s Regional Transportation District was tops in bonds for the state in 2014 with $440.9 million. RTD worked aggressively on its FasTracks rail system and completed its redevelopment of Denver’s Union Station in 2014. The historic train station is now the hub of RTD’s system. Stifel Nicholaus was the state’s top senior manager with $720.5 million. First Southwest Co. ranked first among financial advisors with $730 million, and Butler Snow led the bond counsel rankings with $1.2 billion. At $4.25 billion, Colorado’s volume fell nearly 39% from 2013’s total.

: Wichita outranked other issuers in Kansas by selling $469 million of bonds in 2014. The state’s largest city was followed closely by the Kansas Department of Transportation at $462.9 million. Piper Jaffray was first among underwriters with deals valued at $599.5 million. Financial advisor Springsted sprang ahead of the competition with $519.3 million worth of deals, while Gilmore & Bell easily outdistanced other bond counsel with $2.67 billion. Total volume in the state rose nearly 26% to $3.28 billion.

The New Mexico Municipal Energy Acquisition Authority, a prepaid gas provider, represented nearly a third of the bond volume in the state with a single $727 million deal that was the Southwest’s largest outside Texas. RBC Capital Markets stood out among underwriters with $1.03 billion of volume, more than the other members of the top five combined, while also leading financial advisors with $756.3 million of deals. Modrall Sperling outranked other law firms as bond counsel with deals valued at $1.584 billion, more than three times the other members of the top five combined. New Mexico’s volume for 2014 rose nearly 48% to $2.29 billion.

Oklahoma’s Grand River Dam Authority, a wholesale provider of water and electric power, emerged as the state’s top issuer in 2014 with $375.5 million of bonds, slightly ahead of the Oklahoma Capitol Improvement Authority’s $360 million. JPMorgan topped senior managers with $437 million, while Public Financial Management led financial advisors with $494.7 million. The Floyd Law Firm topped bond counsel rankings with $642.5 million. Bond volume of $2.68 billion statewide was down 8.5% from 2013.

The Texas Transportation Commission issued $5.52 billion in 2014, achieving record savings on refundings as interest rates slid at year’s end. Projects such as the Interstate 635 redevelopment in Dallas, depicted in this rendering, are among the major undertakings in the rapidly growing state. Bank of America Merrill Lynch surpassed JPMorgan as top senior manager in Texas with $5.27 billion of bond transactions. First Southwest Co., the perennial leader among financial advisors, handled $13 billion of transactions in the state, while Estrada Hinojosa & Co. moved up to second with $8.75 billion, including the TTC business. McCall, Parkhurst & Horton’s $13 billion of issues was more than second-place Andrews Kurth’s and third-place Norton Rose Fulbright’s combined. At $41.02 billion, volume from all issuers in the Lone Star State rose more than 25% compared to 2013.

The Utah State Board of Regents, which issues debt for the University of Utah and other universities, earned top spot among issuers in the Beehive State in 2014 with deals valued at nearly $640 million. RBC Capital Markets emerged first among underwriters with $485 million of volume, while George K. Baum & Co. topped financial advisors with $660 million of debt. Ballard Spahr led bond counsel firms with $1.28 billion. Among all issuers in the state, volume rose 13% to $2.44 billion. Across the region, issues for colleges and universities rose 4%.

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