BRADENTON, Fla. – In the Southeast, pent-up need for capital and low interest rates translated into a five-year high for new money and refunding bond issuance last year.
Issuers in the region's 11 states sold $68.78 billion of municipal bonds in 2015, a 39.4% upswing that was the largest year-over-year increase in the country, according to Thomson Reuters data.
Total issuance in 2015 was the highest in the Southeast since volume topped $77 billion in 2010, the final year in which the taxable Build America Bond program contributed to a spate of new volume.
The spike in volume was led by $30.3 billion of refunding transactions in 789 deals for an increase of 31% from 2014. Combined refunding and new money offerings skyrocketed by 76% to $12.78 billion.
New money debt also reached a five-year high of $25.67 billion in 725 transactions, a 35.7% increase over 2014.
Tax-exempt issuance rose by 39% to $60.9 billion, while taxable deals increased by 34.6% to $5 billion. Offerings subject to the alternative minimum tax increased 61% to $2.8 billion.
Issuers sold $51.6 billion of bonds defined by Thomson Reuters as revenue bonds, an increase of 41%, while the use of what were defined as general obligation bonds rose by 35.5% to $17.2 billion.
The amount of debt sold by negotiation jumped by 61% to $44.4 billion, while competitive transactions increased 18% to $19.3 billion. Private placements were down 5.7% to $5 billion.
As in years past, the top reason issuers came to market was to fund educational projects, representing $18.8 billion of bonds, a dramatic increase in volume of 50% over the prior year.
Debt issued for general purposes amounted to $14.6 billion, a 20.7% increase. Utility issuance increased by 49% to $8.3 billion. Funding for transportation projects rose 27% to $8.4 billion. Healthcare saw issuance rise 35% to $5.9 billion, and electric power bond deals increased by 85% to $4.4 billion.
Development projects saw a 60% increase in financing on volume of $2.97 billion, while offerings for public facilities increased by 86% to $2.8 billion and housing deals totaled $2 billion, up 22%. The only category to see a decline last year was issuance for environmental facilities, dropping to $526 million, a decrease of 25%.
Public Financial Management Inc. remained the No. 1 financial advisor in the Southeast, credited with deals worth $14.5 billion. First Southwest, which merged with Southwest Securities last year, came in second place advising on $5.1 billion.
Public Resources Advisory Group came in third with $3.98 billion, and Davenport & Co. was fourth with $3.18 billion.
Compass Municipal Advisors LLC appeared in the Southeast financial advisory rankings for the first time last year, coming in fifth with $2 billion in 77 transactions. Most of the deals were for public school districts in South Carolina where the firm ranked No. 1 after completing its first full year in business in 2015.
The firm's issuance volume was spurred by refundings of installment purchase revenue bonds, which were originally issued in 2006 before a state sunset of the bond program became effective, said Compass managing director Brian Nurick.
"I see another robust year for 2016 fueled by additional refundings and new money due to successful bond referendums," he said.
Nurick credited the firm's success to the fact that most of its team members worked together more than a decade at Ross, Sinclaire & Associates and Southwest Securities before incorporating Compass as an independent financial advisory firm in November 2014.
In addition to maintaining clients in South Carolina's K-12 sector, Nurick said the firm expects to work on more city and county deals going forward.
In the senior manager rankings, Citi rose to first place in the Southeast, up from third in 2014, credited with $10.9 billion in transactions. Bank of America Merrill Lynch came in second with $8.3 billion, and Wells Fargo Securities was third with $7.3 billion.
Greenburg Traurig PA was the top bond counsel, credited with $4.13 billion in transactions, including $1 billion of bonds issued by Florida Citizens Property Insurance Corp. in May and a $215 million deal in September that launched Orlando International Airport's $3 billion expansion and renovation program.
Squire Patton Boggs came in second place as bond counsel with $3.1 billion, and Hawkins Delafield was third with $2.98 billion.
Florida issued the most debt of any state in the region, with its issuers selling $20.7 billion of bonds last year, a 48% increase. Miami-Dade County led the slate with deals totaling $2.16 billion. The Florida State Board of Education was the second-most prolific issuer in the Sunshine State and the region with deals worth $1.5 billion.
Georgia issuers brought 35% more debt to market last year with $7.4 billion in sales. Atlanta was the state's largest issuer with combined deals worth $1.5 billion, followed by the state of Georgia with offerings totaling $1.3 billion.
Virginia had the third-highest volume in the region with $7.1 billion, a year-over-year decrease of 0.3%. The Virginia College Building Authority was the state's top issuer with $1.26 billion in deals.
North Carolina issuers sold $6.5 billion of bonds for an increase of 65.4% over 2014. The state's largest issuer was Charlotte with $717 million in sales, followed by the North Carolina Medical Care Commission's $602 million.
South Carolina saw an almost 47% upswing in issuance with $5.8 billion in sales. The South Carolina Public Service Authority, known as Santee Cooper, was the top issuer with $1.4 billion.
Tennessee increased bond sales by 71% last year to $5.1 billion. The Metropolitan Government of Nashville and Davidson County was top issuer with $623.8 million of debt, followed by the Tennessee Housing Development Authority with $489 million.
Louisiana issuers brought $4.6 billion in transactions, a slight uptick of 3.1%. The state government was the biggest issuer with $1.03 billion, followed by the New Orleans Aviation Board's $590 million general airport revenue bond offering to finance a new terminal at Louis Armstrong New Orleans International Airport.
Kentucky issuers increased debt sales by 57.4% to $4.37 billion. The Kentucky State Property & Building Commission was the top issuer with $524.7 million of bonds.
In Alabama, issuance increased 12.6% to $3.6 billion. The Alabama Federal Aid Highway Finance Authority was the largest issuer at $533.2 million, through a single bond sale in January, the final tranche of the $1 billion statewide transportation program.
Mississippi issuers more than quadrupled their volume compared to 2014, hitting $2.5 billion. The state government was the largest issuer, there, bringing $1.2 billion.
West Virginia volume was up 26.5% to $949 million. The state government was the largest issuer with $205.4 million of bond sales.
