This year's surge in municipal bond new issuance may be starting to slow down, according to a report by CUSIP Global Services, which tracks requests for new security identifiers.
In May, CUSIP requests for municipal bonds fell 3% to 1,527 from 1,579 in April. It was the first decline in for muni bond requests in four months. Short-term muni note requests edged lower in May with 93 applications made, compared with 94 in April. Long-term muni note requests fell to 13 from 27.
On a year-over-year basis, however, municipal bond applications were up by 45.2%. So far this year, there were 6,795 requests made compared to 4,679 in 2014. Texas topped bond issuers in 2015, with a total of 851 requests made.
For the first five months of 2015, all municipal securities CUSIP applications totaled 7,556 up 35% from 5,588 in 2015.
The report also indicated that corporate bond issuance may be slowing.
Total CUSIP requests for new U.S. and Canadian corporate equity and debt fell 8% in May, with a total of 2,170 new identifiers requested. On a year-over-year basis, corporate CUSIP request volume was down 3.9%.
"Within the broad category of domestic corporate CUSIPs, we've seen some mixed signals in May, following several months of unmitigated growth," Gerard Faulkner, Director of Operations for CUSIP Global Services, said in a press release. "While volume is still strong across all asset classes, the blip in corporates and municipal bonds this month is a noteworthy change in the recent trend."
CGS is managed on behalf of the American Bankers Association by S&P Capital IQ.
"As long as the Federal Reserve continues to keep rates low, we expect bond issuers to continue to issue new debt," Richard Peterson, S&P Capital IQ's Senior Director of Global Markets Intelligence, said in the release. "While the slight pull-back this month may be the first sign of a slowdown in the runaway pace of new issuance, we do expect to continue to see a high overall volume of new security issuance in the days and weeks to come."
