Taxable Municipal Guide - Piper Jaffray

September 2010
Exhibit 1
Long-Term Municipal Issuance
Par Amount (US$ mil)
Number of Issues
Year Total Taxable % Total Taxable %
1999 219,508 13,782 6.3% 12,345 859 7.0%
2000 194,634 11,858 6.1% 10,595 736 6.9%
2001 284,679 14,740 5.2% 13,335 735 5.5%
2002 355,530 18,880 5.3% 14,054 842 6.0%
2003 378,551 40,091 10.6% 14,770 1,089 7.4%
2004 356,875 23,737 6.7% 13,327 904 6.8%
2005 406,503 25,281 6.2% 13,783 875 6.3%
2006 383,087 28,681 7.5% 12,471 864 6.9%
2007 424,487 28,360 6.7% 12,259 901 7.3%
2008 386,812 23,827 6.2% 10,465 663 6.3%
Total 3,390,664 229,236 6.8% 127,404 8,468 6.6%
Source: Securities Data Corp.
While the taxable municipal market was a relatively small portion of the overall municipal market,
there were still a number of larger transactions in the taxable muni market. Currently there are 128
taxable municipal issues (Non BAB) with outstanding principal balances of $250 million or more,
totaling $99.4 billion.
Build America Bonds and the Growth of the Taxable Municipal Market
During the credit crisis that began in 2008, the municipal market was hit particularly hard. Bond
insurers, who collectively insured 52 percent of total municipal issuance in 2007, were downgraded
multiple times, with several of the insurers forced to exit the market due to the deterioration of
their financial position. As a result, demand for bond insurance dropped dramatically, as only 22
percent of municipal issues were insured in 2008.
Yields on municipal bonds increased significantly in 2008 as the credit crisis unfolded, making
financing more expensive for municipal issuers. As a benchmark indicator, Exhibit 2 shows the
rates on a 30-year triple-A rated municipal debt through 2008, expressed as a percentage of the 30-
year Treasury.
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Piper Jaffray Taxable Municipal Guide