Muni bonds to surge as corporate debt slows on ‘anxiety’

CUSIP Global Services expects a surge in municipal-bond issuance over the next 30 days to 90 days and a global slowdown in the sale of corporate debt because of “market anxiety.”
Municipal debt CUSIP requests were up almost 30 percent in May with 1,222 orders, compared with 943 requests in April, the New York-based provider of new security identifiers said today in a statement.
“That’s the highest number of requests for municipal bonds since December,” when there were 1,404 such orders, Richard Peterson, director of Standard & Poor’s valuation and risk strategies group, said today in phone interview.
CUSIP Global Services is managed by S&P for the American Bankers Association. The Committee on Uniform Securities Identification Procedures number consists of nine-characters and is used to identify financial securities.
Year-to-date muni requests are still down 20.1 percent from last year, with long-term note CUSIP identifiers off 40.1 percent and short-term notes down 15.1 percent, according to the statement.
The number of CUSIP requests for corporate debt indicates global sales will drop over the next few months.
The company said the number of corporate CUSIP orders in the U.S. fell to 1,667 in May, from 1,691 in April. International requests also declined last month to 153 for corporate debt, from 199 in April.
“It’s the first back-to-back monthly decline for international debt CUSIP requests since June-July of 2009,” Peterson said.
The May drop in volume for several asset classes reflects “recent market anxiety” even as year-over-year growth remains strong, Peterson said in CUSIP’s statement today.
In the U.S., corporate debt requests are still up 8.6 percent year-to-date. International debt CUSIP requests are up 45.9 percent through May of this year, compared with the first five months of last year.
–Bloomberg News–