MUNICIPAL BOND CREDIT REPORT First Quarter 2018 RESEARCH REPORT

Transcription

1 MUNICIPAL BOND CREDIT REPORT First Quarter 2018 RESEARCH REPORT

2 TABLE OF CONTENTS Table of Contents... i Market Summary... 2 Charts & Data... 4 Long-Term Municipal State Issuance, 1Q Long-Term Municipal Issuance by General Use of Proceeds... 6 Build America Bonds... 7 Supply, Yield Curves, Total Return, Spreads & Ratios... 7 Trading Summary... 9 Municipal CDS Current State GO Rating Outstanding Municipal Debt The report is subject to the Terms of US applicable to SIFMA's website, available here: SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit i

3 MARKET SUMMARY Source: Thomson Reuters Source: ICE BofAML Source: EMMA MSRB Total Return by Municipal Bond Sector (2018:Q1) Pollution Control Multifamily Housing Tobacco Miscellaneous Single Family Housing Leasing/Rental Health Power State Water Hospital Revenue GO Airport Education Transportation Local Utilities Toll/Turnpike Tax (1.50) (1.00) (0.50) - Percent Municipal Issuance Overview Primary Market According to Thomson Reuters, long-term public municipal issuance volume totaled $61.9 billion in the first quarter of 2018, a decline of 54.6 percent from the prior quarter ($136.4 billion) and a decline of 28.5 percent year-over-year (y-o-y) ($85.5 billion). Including private placements 1 ($1.4 billion), long-term municipal issuance for 1Q 18 was $63.3 billion. Tax-exempt issuance totaled $55.1 billion in 1Q 18, a decline of 53.9 percent q-o-q and 28.0 percent y-o-y. Taxable issuance totaled $5.0 billion in 1Q 18, a decline of 59.9 and 36.5 percent, respectively, q-o-q and y-o-y. AMT issuance was $2.2 billion in 1Q 18, a decline of 59.0 percent q-o-q and 19.6 percent y-o-y. By use of proceeds, general purpose led issuance totals in 1Q 18 ($17.2 billion), followed by primary & secondary education ($14.7 billion), higher education ($4.2 billion), water & sewer facilities ($4.1 billion) and toll roads/highways/streets ($3.3 billion). Refunding volumes plummeted to 19.4 percent of issuance in 1Q 18 from 47 percent in the prior quarter as advance refundings were eliminated beginning in 2018 with the passage of the Tax Cuts and Jobs Act. 2 Yields, Inflows, and Total Return Ratios of 10-year tax-exempt AAA GOs and similar-maturity Treasuries remained unchanged in the first quarter on a q-o-q basis, averaging 86.0 percent in both 1Q 18 and 4Q 17. According to the Investment Company Institute (ICI), fourth quarter net flow into long-term tax-exempt funds was positive, with $10.7 billion of net inflow in 1Q 18 compared to to $2.2 billion of inflow from 4Q 17 and $7.1 billion of net inflow y-o-y. According to ICE BofAML indices, municipals lost 1.1 percent in the first quarter of For the first quarter, pollution control, multifamily, and tobacco bonds outperformed among the individual municipal sectors (a decline of 0.3 percent, 0.4 percent and 0.6 percent respectively) in 1Q 18 while tax, toll/turnpike, and utilities underperformed relative to other municipal sectors (a decline of 1.3 percent in all three sectors). Build America Bonds (BABs) also lost 1.1 percent in 1Q 18, performing similary to tax-exempt bonds but outperforming similarly-rated corporate bonds (a total return loss of 2.3 percent). Trading Activity Trading activity fell q-o-q to $11.4 billion daily in 1Q 18, a 5.5 percent decrease from 4Q 17 ($12.0 billion) but a 2.0 percent increase from 1Q 17 ($11.1 billion). By number of trades, trading activity rose 9.4 percent on a q- o-q basis but fell 0.6 percent on a y-o-y basis. Broker-Dealers and Holdings Bank holdings of municipal loans rose in 4Q 17 from the prior quarter to $190.6 billion (from $183.4 billion) while holdings of bonds also rose slightly to $385.9 billion (from $383.5 billion). 1 Private placement figures are excluded in charts and tables. 2 Percentages represent both full refundings and the half the dollar amount of deals that contain both refundings and new financing. 2

4 $ millions 250, , , ,000 50,000 Source: FDIC, Federal Reserve AGM NATL AMBAC AGC BAM FGIC XLCA BHAC MAC ACA Source: Bloomberg Municipal Loans Outstanding Q1 2010Q1 2013Q1 2016Q1 Municipal Loan Holdings (left) Loans as % of Bank Municipal Holdings (right) Outstanding Insured Municipal Bonds by Insurer (2018:Q1) 35% 30% 25% 20% 15% 10% 5% 0% $0.0 $50.0 $100.0 $150.0 $200.0 $ millions ARS, FRN and VRDO Update Issuance of variable-rate demand obligations (VRDOs), puttable long-term municipal bonds with interest rates that reset periodically, remain muted in the first quarter. A total of $462.7 million was issued in 1Q 18, a decline of 74.6 percent and 50.4 percent, respectively, q-o-q and y-o-y. The SIFMA Municipal Swap index, a seven-day high-grade market index comprised of tax-exempt VRDOs, ended March at 1.58 percent, averaging 1.21 percent throughout 1Q 18, 16 basis points wider than 4Q 17 s average (1.05 percent) and 52 basis points wider than 1Q 17 s average (0.69 percent). Floating rate bond issuance declined slightly quarter over quarter with $690.8 million issued in 1Q 18, an 11.6 percent decline q-o-q and a 27.6 percent decline y-o-y. Insured Municipal Bonds For the first quarter of 2018, $3.3 billion of municipal bonds issued were insured, representing approximately 5.3 percent of all issuance, down slightly year-over-year from the $5.2 billion insured in 1Q 17 (representing 6.0 percent of issuance). As of the end of the first quarter, approximately $395.4 billion of insured municipal bonds were outstanding, a decline of 0.4 percent q-o-q and 21.1 percent y-o-y. Government Update According to the Nelson A. Rockefeller Institute of Government, preliminary figures for the fourth quarter of 2017 indicate strong growth in state tax revenue with total tax collections increasing by 12.3 percent, personal income growing by 16.7 percent, sales tax income growing by 6.9 percent, and corporate income tax collections increasing by 11.0 percent. 3 However, the strong growth might be attributable to the passage of Tax Cuts and Jobs Act, which created incentives to prepay state and local taxes to take advantage of expiring tax breaks. 3 SUNY Rockefeller Institute of Government, Revenues Likely to Fluctuate Due to the Passage of the Federal Tax Cuts and Jobs Act and as States Explore Ways to Mitigate Its Impact, March

5 $ Millions 5 LONG-TERM MUNICIPAL STATE ISSUANCE, 1Q 18 4 CHARTS & DATA Bond Type Tax Type Funding Type Refunding & State Total G.O. Revenue AMT Tax-Exempt Taxable New Financing Refinancing New Refinancing Refunding Alabama 1, , , Alas ka 0.0 American Samoa 0.0 Arizona Arkansas California 8, , , , , , ,271.6 Colorado 1, , Connecticut 1, , , , District of Columbia Delaware Florida 1, , , Georgia 1, , , , Guam 0.0 Hawaii 1, Idaho Illinois 2, , , ,349.9 Indiana Iowa Kansas Kentucky 1, , , , Louisiana Maine Maryland 1, , , , Massachusetts 1, , , , Michigan 1, , Minnesota 1, , , , Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York 8, , , , , , ,250.5 North Carolina North Dakota Ohio 2, , , , , Oklahoma 2, , , , Oregon Pennsylvania 2, , , , Puerto Rico 0.0 Rhode Island South Carolina South Dakota Tennessee Texas 5, , , , , , Utah 1, , Vermont Virgin Islands 0.0 Virginia 1, , , Washington 1, , West Virginia Wisconsin 1, , , Wyoming 0.0 ALL 61, , , , , , , , ,844.1 QoQ -54.6% -42.7% -61.4% -59.0% -53.9% -59.9% -15.9% N/A -66.1% -86.3% YoY -28.5% -27.0% -29.7% -19.6% -28.0% -36.5% 12.8% N/A -64.7% -64.9% 4 Issuance totals do not include private placements. 5 Due to securities falling into more than one category within subcategories, state breakouts are not identical to other non-state-specific breakdowns, particularly related to coupon types (e.g., zeros are higher by dollar amount when broken out by state but would instead be assigned to the convertible or fixed rate categories when not broken out by state). This is a quirk of the SDC database. 4

6 Coupon Type State Total Convertible Fixed Rate Linked Rate Variable Rate Long Variable Rate No Put Variable Rate Short (VRDO) Zero Alabama 1, Alas ka 0.0 American Samoa 0.0 Arizona Arkansas California 8, , Colorado 1, , Connecticut 1, , District of Columbia Delaware Florida 1, , Georgia 1, Guam 0.0 Hawaii 1, , Idaho Illinois 2, , Indiana Iowa Kansas Kentucky 1, Louisiana Maine Maryland 1, , Massachusetts 1, , Michigan 1, , Minnesota 1, , Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York 8, , North Carolina North Dakota Ohio 2, , Oklahoma 2, , Oregon Pennsylvania 2, , Puerto Rico 0.0 Rhode Island South Carolina South Dakota Tennessee Texas 5, , Utah 1, , Vermont Virgin Islands 0.0 Virginia 1, , Washington 1, , West Virginia Wisconsin 1, , Wyoming 0.0 ALL 61, , , QoQ -54.6% % -55.6% -11.6% -3.3% % -74.6% -50.6% YoY -28.5% % -30.2% -27.6% 132.0% -50.4% -42.8% 5

7 LONG-TERM MUNICIPAL ISSUANCE BY GENERAL USE OF PROCEEDS $ Millions Use of Proceeds 1Q'17 4Q'17 1Q'18 Q-o-Q Y-o-Y Airports 3, , , % -32.5% Assisted Living % 60.9% Bridges 2, , % -86.0% Childrens hospital % 57.8% Churches Temples and Mosques % Civic & convention centers % 424.2% Combined utilities % 10.5% Cont Care Retirement Community , % -75.2% Correctional facilities % 20.0% Economic development 1, , , % -17.2% Fire stations & equipment % -16.2% Flood control % -53.5% Gas , , % % General acute care hospital 4, , , % -44.4% General Medical % % General purpose /public improvement 21, , , % -20.7% Government buildings % 253.4% Higher education 12, , , % -65.5% Industrial development % Libraries & museums % -63.8% Mass transportation 3, , , % -36.3% Multi family housing 1, , % -35.7% Nursing homes % 35.5% Office buildings % Other education % 1.7% Other recreation % 26.2% Parking facilities % -1.4% Parks, Zoos & Beaches % -47.1% Police stations & equipment % -55.6% Pollution control % % Primary & secondary education 18, , , % -21.1% Public power 1, , , % -34.3% Sanitation % -8.7% Seaports /marine terminals % -64.0% Single family housing 1, , , % -36.0% Single speciality hospital % -97.6% Solid waste % 4.1% Stadiums & sports complexes % 216.5% Student loans % % Telecommunications % -20.8% Theatres % 245.5% Toll roads, highways & streets 2, , , % 14.7% Water & sewer facilities 6, , , % -37.1% ALL 86, , , % -28.5% 6

8 BUILD AMERICA BONDS Percent Build America Bonds Average Yield and Coupon Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Percent Build America Bond Average Years to Maturity Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Source: Wells Fargo Wells Fargo Build America Bond Index Average Yield Wells Fargo Build America Bond Index Average Coupon \ Source: Wells Fargo Wells Fargo Build America Bond Index Average Years to Maturity SUPPLY, YIELD CURVES, TOTAL RETURN, SPREADS & RATIOS Bond Buyer 30-Day Visible Supply $ millions Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 BB Visible Supply Competitive Negotiated Source: Bond Buyer 7

9 Percent MMA Yield Curves Years to Maturity /31/ /29/2017 3/29/2018 Source: MMA Source: MMA MCDX (5- and 10- Year) Municipal Total Return 80 8 Percent Percentage Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 5 Year 10 Year Q1 Source:Markit Source: ICE BofAML Corporate versus Build America Bonds Total Return Percentage Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Corporates, A-AA Rated BABS Source:ICE BofAML Source: ICE BofAML 8

10 TRADING SUMMARY Total Number of Trades # of Trades Par Amount (Millions) Customer Bought Customer Sold Inter-Dealer Trade All Trades Customer Bought Customer Sold Inter-Dealer Trade All Trades 2017:Q4 958, , ,019 2,423, , , ,386 $756, :Q1 981, , ,143 2,565, , , ,253 $692,680 %Change 2% 11% 6% 6% -16% 3% -8% -8% # of Trades # of Trades Par Amount (Millions) 500, , , , ,000 1,000,000 1,000,000+ All Trades 0-100, , ,000 1,000,000 1,000,000+ All Trades 2017:Q4 79% 14% 3% 4% 2,423,097 9% 11% 7% 73% $756, :Q1 82% 12% 2% 4% 2,565,659 10% 11% 7% 72% $692,680 Trades by Sector Education Health Utility Various Purpose Transportation Tax-Revenue Other Total (Millions) 2017:Q4 17% 12% 11% 12% 9% 10% 29% $756, :Q1 18% 11% 12% 12% 8% 10% 29% $692,680 Trades by Maturity 1 Year or Less 1+ Year to 5 Years 5+ Years to 10 Years 10+ Years to 20 Years 20+ Years Total (Millions) 2017:Q4 6% 11% 15% 35% 32% $756, :Q1 5% 11% 16% 34% 33% $692,680 Trades by Source of Repayment Revenue General Obligation Double Barrel Not Available Total (Millions) 2017:Q4 70% 27% 2% 1% $756, :Q1 69% 28% 2% 1% $692,680 Trades by Coupon Type Fixed Rate Variable Rate Zero Coupon Not Available Total (Millions) 2017:Q4 64% 34% 2% 0% $756, :Q1 61% 36% 3% 0% $692,680 Source: MSRB EMMA 9

11 MUNICIPAL CDS CDS Yield Curves for Single Name States and New York City (bps ) as of March 29, M 1Y 2Y 3Y 4Y 5Y 7Y 10Y CA California CT Connecticut DE Delaware FL Florida IL Illinois MA Massachusetts MD Maryland MI Michigan MN Minnesota NC North Carolina NJ New Jersey NV Nevada NY New York OH Ohio PA Pennsylvania RI Rhode Island SC South Carolina TX Texas UT Utah VA Virginia WA Washington WI Wisconsin NYC New York City CURRENT STATE GO RATING State Moody's S&P Fitch State Moody's S&P Fitch Alabama Aa1 AA AA Montana Aa1 AA AA+ Alas ka Aa3 AA AA Nebraska American Samoa Nevada Aa2 AA AA+ Arizona New Hampshire Aa1 AA AA+ Arkansas Aa1 AA New Jersey A3 A- A California Aa3 AA- AA- New Mexico Aa1 AA Colorado New York Aa1 AA+ AA+ Connecticut A1 A+ A+ North Carolina Aaa AAA AAA District of Columbia Aa1 AA AA North Dakota Delaware Aaa AAA AAA Ohio Aa1 AA+ AA+ Florida Aa1 AAA AAA Oklahoma Aa2 AA AA Georgia Aaa AAA AAA Oregon Aa1 AA+ AA+ Guam BB- Pennsylvania Aa3 A+ AA- Hawaii Aa1 AA+ AA Puerto Rico Ca D D Idaho Rhode Island Aa2 AA AA Illinois Baa3 BBB- BBB South Carolina Aaa AA+ AAA Indiana South Dakota Iowa Tennessee Aaa AAA AAA Kansas Texas Aaa AAA AAA Kentucky Aa3 A+ Utah Aaa AAA AAA Louisiana Aa3 AA- AA- Vermont Aaa AA+ AAA Maine Aa2 AA Virgin Islands Maryland Aaa AAA AAA Virginia Aaa AAA AAA Massachusetts Aa1 AA AA+ Washington Aa1 AA+ AA+ Michigan Aa1 AA- AA West Virginia Aa2 AA- AA Minnesota Aa1 AA+ AAA Wisconsin Aa1 AA AA+ Mississippi Aa2 AA AA Wyoming Missouri Aaa AAA AAA 10

12 Outstanding by Type, Maturity, and Security Type 6 $ Millions OUTSTANDING MUNICIPAL DEBT State Total Outstanding G.O. Revenue Due in 13 Months Long-Term 2017:Q4 Total Outstanding % Change AK Alas ka 10, , , , , % AL Alabama 36, , , , , , % AR Arkansas 14, , , , , % AS American Samoa % AZ Arizona 56, , , , , , % CA California 585, , , , , , % CO Colorado 65, , , , , , % CT Connecticut 52, , , , , , % DC District of Columbia 31, , , , , % DE Delaware 7, , , , , % FL Florida 146, , , , , , % GA Georgia 74, , , , , , % GU Guam 3, , , , % HI Hawaii 21, , , , , , % IA Iowa 22, , , , , , % ID Idaho 7, , , , , % IL Illinois 172, , , , , , % IN Indiana 47, , , , , , % KS Kansas 26, , , , , , % KY Kentucky 36, , , , , , % LA Louisiana 37, , , , , , % MA Massachusetts 106, , , , , , % MD Maryland 61, , , , , , % ME Maine 8, , , , , % MI Michigan 79, , , , , , % MN Minnesota 53, , , , , , % MO Missouri 48, , , , , , % MS Mississippi 17, , , , , % MT Montana 4, , , , , % NC North Carolina 52, , , , , , % ND North Dakota 5, , , , , % NE Nebraska 20, , , , , , % NH New Hampshire 8, , , , , % NJ New Jersey 123, , , , , , % NM New Mexico 14, , , , , , % NV Nevada 26, , , , , , % NY New York 408, , , , , , % OH Ohio 112, , , , , , % OK Oklahoma 22, , , , , , % OR Oregon 43, , , , , , % OT Other Territories 10, , , , , % PA Pennsylvania 138, , , , , , % PR Puerto Rico 99, , , , , , % RI Rhode Island 11, , , , , % SC South Carolina 38, , , , , , % SD South Dakota 5, , , , , % TN Tennessee 43, , , , , , % TT Trust Territories % TX Texas 362, , , , , , % UT Utah 25, , , , , , % VA Virginia 68, , , , , , % VI Virgin Islands 2, , , , % VT Vermont 4, , , , % WA Washington 91, , , , , , % WI Wisconsin 57, , , , , , % WV West Virginia 10, , , , % WY Wyoming 2, , , , % TOTAL (3/31/2018) 3,649, ,193, ,455, , ,453, ,662, % TOTAL (12/31/2017) 3,662, ,196, ,465, , ,468,137.4 % Change -0.4% -0.2% -0.4% 1.1% -0.4% 6 As of the first quarter 2017, outstanding totals includes both short- and long-term municipal debt and now includes all refunded (inclusive of prerefunded) debt, but does not include municipal derivatives. Data prior to 1Q 17 excluded refunded debt from general totals. Due in 13 months looks at original maturity and will not include securities with short puts unless original maturity is within 13 months. Differences between this data and the Federal Reserve Flow of Funds are due to underlying database differences (Fed: Mergent; these tables: Bloomberg) as well as the growth of the municipal direct loan market. Fixed rate debt does not include those multimodal bonds that are currently in long-term fixed rate mode. 11

13 Outstanding and by Tax Status, Coupon 7 $ Millions State Total Outstanding Tax-Exempt BQ AMT Taxable Fixed Zero AK Alas ka 10, , , , AL Alabama 36, , , , , AR Arkansas 14, , , , , AS American Samoa AZ Arizona 56, , , , , CA California 585, , , , , , ,205.7 CO Colorado 65, , , , , , ,856.6 CT Connecticut 52, , , , , , DC District of Columbia 31, , , , , ,586.4 DE Delaware 7, , , , FL Florida 146, , , , , ,055.9 GA Georgia 74, , , , , , ,976.0 GU Guam 3, , , HI Hawaii 21, , , , , IA Iowa 22, , , , , ID Idaho 7, , , IL Illinois 172, , , , , , ,877.4 IN Indiana 47, , , , , , KS Kansas 26, , , , , KY Kentucky 36, , , , , , LA Louisiana 37, , , , , , ,043.5 MA Massachusetts 106, , , , , , ,047.0 MD Maryland 61, , , , , ME Maine 8, , ,957.6 MI Michigan 79, , , , , , ,836.5 MN Minnesota 53, , , , , , MO Missouri 48, , , , , MS Mississippi 17, , , , , MT Montana 4, , , NC North Carolina 52, , , , , ND North Dakota 5, , ,610.8 NE Nebraska 20, , , , , NH New Hampshire 8, , , , NJ New Jersey 123, , , , , , ,805.1 NM New Mexico 14, , , , NV Nevada 26, , , , , NY New York 408, , , , , , ,589.7 OH Ohio 112, , , , , , ,484.0 OK Oklahoma 22, , , , , OR Oregon 43, , , , , , ,066.4 OT Other Territories 10, , , PA Pennsylvania 138, , , , , , ,107.2 PR Puerto Rico 99, , , , ,222.6 RI Rhode Island 11, , , , ,542.3 SC South Carolina 38, , , , ,385.8 SD South Dakota 5, , ,533.7 TN Tennessee 43, , , , , ,925.2 TT Trust Territories TX Texas 362, , , , , , ,792.3 UT Utah 25, , , , , VA Virginia 68, , , , , ,618.1 VI Virgin Islands 2, , , VT Vermont 4, , ,753.1 WA Washington 91, , , , , , ,732.7 WI Wisconsin 57, , , , , , ,020.2 WV West Virginia 10, , , , ,056.3 WY Wyoming 2, , ,546.3 TOTAL (3/31/2018) 3,649, ,868, , , , ,992, ,307.7 TOTAL (12/31/2017) 3,662, ,875, , , , ,998, ,768.1 % Change -0.4% -0.2% -1.7% -0.6% -0.6% -0.2% -0.2% 7 As of the first quarter 2017, outstanding totals includes both short- and long-term municipal debt and now includes all refunded (inclusive of prerefunded) debt, but does not include municipal derivatives. Data prior to 1Q 17 excluded refunded debt from general totals. Due in 13 months looks at original maturity and will not include securities with short puts unless original maturity is within 13 months. Differences between this data and the Federal Reserve Flow of Funds are due to underlying database differences (Fed: Mergent; these tables: Bloomberg) as well as the growth of the municipal direct loan market. Fixed rate debt does not include those multimodal bonds that are currently in long-term fixed rate mode. 12

14 Addendum Tables Build America Bonds, Prerefunded, Derivatives and Insured 8 $ Millions State Total Outstanding BAB Only Prerefunded Only All Refunded Derivatives Only Insured AK Alas ka 10, AL Alabama 36, , , ,034.9 AR Arkansas 14, ,471.0 AS American Samoa 76.1 AZ Arizona 56, , , , , ,627.6 CA California 585, , , , , ,533.4 CO Colorado 65, , , , , ,154.9 CT Connecticut 52, , , , , ,486.7 DC District of Columbia 31, , , , , ,307.4 DE Delaware 7, FL Florida 146, , , , , ,131.1 GA Georgia 74, , , , , ,919.2 GU Guam 3, HI Hawaii 21, , , , IA Iowa 22, , , ,261.3 ID Idaho 7, IL Illinois 172, , , , , ,142.5 IN Indiana 47, , , , , ,217.5 KS Kansas 26, , , , ,289.8 KY Kentucky 36, , , , ,071.9 LA Louisiana 37, , , ,749.8 MA Massachusetts 106, , , , , ,988.4 MD Maryland 61, , , , ,415.0 ME Maine 8, MI Michigan 79, , , , , ,186.7 MN Minnesota 53, , , ,552.8 MO Missouri 48, , , , , ,107.7 MS Mississippi 17, , , ,419.0 MT Montana 4, NC North Carolina 52, , , , ,002.7 ND North Dakota 5, NE Nebraska 20, , , NH New Hampshire 8, , NJ New Jersey 123, , , , , ,684.1 NM New Mexico 14, , NV Nevada 26, , , , ,030.2 NY New York 408, , , , , ,742.3 OH Ohio 112, , , , , ,901.0 OK Oklahoma 22, , , ,381.1 OR Oregon 43, , , ,523.0 OT Other Territories 10, , PA Pennsylvania 138, , , , , ,661.8 PR Puerto Rico 99, , , ,723.6 RI Rhode Island 11, , ,562.0 SC South Carolina 38, , , ,526.2 SD South Dakota 5, TN Tennessee 43, , , , ,943.2 TT Trust Territories TX Texas 362, , , , , ,635.6 UT Utah 25, , , , ,107.6 VA Virginia 68, , , , ,117.7 VI Virgin Islands 2, VT Vermont 4, WA Washington 91, , , , , ,356.2 WI Wisconsin 57, , , , , ,242.2 WV West Virginia 10, WY Wyoming 2, TOTAL (3/31/2018) 3,649, , , , , ,406.9 TOTAL (12/31/2017) 3,662, , , , , ,796.8 % Change -0.4% -0.3% -6.1% -0.8% 1.7% -3.7% 8 As of the first quarter 2017, outstanding totals includes both short- and long-term municipal debt and now includes all refunded (inclusive of prerefunded) debt, but does not include municipal derivatives. Data prior to 1Q 17 excluded refunded debt from general totals. Due in 13 months looks at original maturity and will not include securities with short puts unless original maturity is within 13 months. Differences between this data and the Federal Reserve Flow of Funds are due to underlying database differences (Fed: Mergent; these tables: Bloomberg) as well as the growth of the municipal direct loan market. Fixed rate debt does not include those multimodal bonds that are currently in long-term fixed rate mode. 13

15 Addendum Tables Rating 9 $ Millions State Total Outstanding Rated AAA AA A BBB HY AK Alas ka 10, , , , AL Alabama 36, , , , ,792.7 AR Arkansas 14, , , , AS American Samoa AZ Arizona 56, , , , , , ,415.3 CA California 585, , , , , , ,762.8 CO Colorado 65, , , , , , CT Connecticut 52, , , , , , DC District of Columbia 31, , , , , DE Delaware 7, , , , FL Florida 146, , , , , , ,406.0 GA Georgia 74, , , , , , GU Guam 3, , , HI Hawaii 21, , , , IA Iowa 22, , , , , ,325.2 ID Idaho 7, , , , IL Illinois 172, , , , , , ,739.6 IN Indiana 47, , , , , , KS Kansas 26, , , , , KY Kentucky 36, , , , , , ,191.3 LA Louisiana 37, , , , , , MA Massachusetts 106, , , , , , MD Maryland 61, , , , , , ME Maine 8, , , , MI Michigan 79, , , , , , ,875.8 MN Minnesota 53, , , , , MO Missouri 48, , , , , , MS Mississippi 17, , , , , MT Montana 4, , , , NC North Carolina 52, , , , , , ND North Dakota 5, , , , NE Nebraska 20, , , , , NH New Hampshire 8, , , , NJ New Jersey 123, , , , , , ,502.9 NM New Mexico 14, , , , , NV Nevada 26, , , , NY New York 408, , , , , , ,240.5 OH Ohio 112, , , , , , ,408.3 OK Oklahoma 22, , , , , , ,262.4 OR Oregon 43, , , , , OT Other Territories 10, , , , PA Pennsylvania 138, , , , , , ,743.1 PR Puerto Rico 99, , (366.3) 2, , ,045.1 RI Rhode Island 11, , , , ,730.6 SC South Carolina 38, , , , , SD South Dakota 5, , , , , TN Tennessee 43, , , , , , TT Trust Territories TX Texas 362, , , , , , ,600.4 UT Utah 25, , , , , VA Virginia 68, , , , , , ,467.8 VI Virgin Islands 2, , ,341.6 VT Vermont 4, , , , WA Washington 91, , , , , , WI Wisconsin 57, , , , , , WV West Virginia 10, , , ,719.1 WY Wyoming 2, , TOTAL (3/31/2018) 3,649, ,989, , ,464, , , ,098.0 TOTAL (12/31/2017) 3,662, ,994, , ,467, , , ,137.0 % Change -0.4% -0.1% 0.4% -0.2% -1.9% 4.3% 1.2% 9 As of the first quarter 2017, outstanding totals includes both short- and long-term municipal debt and now includes all refunded (inclusive of prerefunded) debt, but does not include municipal derivatives. Data prior to 1Q 17 excluded refunded debt from general totals. Rating based on the lowest long-term rating assigned to the bond by Fitch Ratings, Moody s Investor Services, or Standard and Poor s; split-rated debt are therefore included in the HY category. Differences between this data and the Federal Reserve Flow of Funds are due to underlying database differences (Fed: Mergent; these tables: Bloomberg) as well as the growth of the municipal direct loan market. Fixed rate debt does not include those multimodal bonds that are currently in long-term fixed rate mode. 14

16 Addendum Tables Industry 10 Industry 2018Q1 2017Q4 QoQ Change YoY Change Other % -0.2% Appropriations 111, , % -0.5% Airport 97, , % 0.3% Airport Tax-Guaranteed % -5.1% Assisted Living 1, , % 12.6% Ad Valorem Backed Lease Revenue 7, , % 5.8% Bond Bank 12, , % -5.1% Continuing Care Retirement 30, , % 5.4% Community Development 7, , % 4.5% Charter Schools 14, , % 14.0% Community College District 42, , % 1.0% Other % 0.0% Economic/Induistrial Development 86, , % -1.7% Secondary Education 31, , % -3.4% Secondary Education - Lease Backed 55, , % 3.3% Gas Contract 21, , % 14.4% General Obligation 688, , % -0.4% General Obligation Districts (Other) 26, , % 0.1% General Obligation Hospital 7, , % -0.2% Government Paid Lease 86, , % -1.0% General Revenue Tax-Guaranteed 16, , % -4.2% Higher Education 246, , % 1.5% Healthcare (General) Tax-Guaranteed 2, , % -10.1% Hospital 261, , % 1.4% Hotel Occupancy 5, , % -6.4% Housing Tax- Guarnteed 1, , % 3.2% Intergovernmental Lease 5, , % -1.0% Income Tax 71, , % 1.9% Independent Living % 0.0% Correctional Facilities 2, , % 2.1% Local multifamily housing 34, , % 2.9% Loan Pool 14, , % 33.8% Lottery 4, , % 0.9% Local Single family housing 2, , % -12.6% Metro Development 5, , % 9.2% Melloroos 12, , % -7.8% Miscellaneous 41, , % -7.3% Miscellaneous Tax 65, , % -6.1% Mobile Home % 6.2% Tobacco 87, , % 1.0% Municipal Utilities 61, , % -3.5% Not for Profit Cultural 7, , % -9.0% Not for Profit Foundation 1, , % 9.9% Not for Profit Human Service Provider 3, , % -4.7% Not for Profit Membership Organization % 3.2% Not for Profit Research 3, , % 21.2% Non-Toll Highway 40, , % 3.5% Nuclear Power 16, , % -4.1% Nursing Home 2, , % -12.7% Pension 18, , % -3.9% Payment in Lieu of Taxes 8, , % -5.9% Parking Facility 3, , % -2.6% Parking Facility - Guaranteed 1, , % 0.4% Port/Marinas 40, , % 1.1% Public Power Systems 82, , % -1.0% Public Transportation 38, , % 16.4% Private Religious School 2, , % -10.7% Sales 108, , % 5.3% School Districts 411, , % 0.2% Self Appropriation 11, , % % Shell Record 1, , % 3.2% State Multifamily Housing 39, , % 0.6% Solid Waste 4, , % 0.4% Special Assessment 5, , % 2.7% State Single-family Housing 41, , % 1.0% Student Housing 10, , % 8.5% Student Loan Revenue 23, , % -11.7% Telecom 1, , % 7.3% Tax Increment Financing 30, , % -3.1% Toll Roads 130, , % 4.5% Indian Tribal 1, , % -21.9% Municipal Utility District 10, , % 3.1% Water & Sewer Guaranteed 3, , % -15.4% Water & Sewer 271, , % -2.0% Total 3,649, ,665, % 0.6% 10 As of the first quarter 2017, outstanding totals includes both short- and long-term municipal debt and now includes all refunded (inclusive of prerefunded) debt, but does not include municipal derivatives. Data prior to 1Q 17 excluded refunded debt from general totals. Rating based on the lowest long-term rating assigned to the bond by Fitch Ratings, Moody s Investor Services, or Standard and Poor s; split-rated debt are therefore included in the HY category. Differences between this data and the Federal Reserve Flow of Funds are due to underlying database differences (Fed: Mergent; these tables: Bloomberg) as well as the growth of the municipal direct loan market. Fixed rate debt does not include those multimodal bonds that are currently in long-term fixed rate mode. 15

17 Kyle Brandon Managing Director, Director of Research Sharon Sung Assistant Vice President, Research SIFMA RESEARCH Daniel Konstantionovsky, Intern Emily Losi, Intern General Research Contact: MUNICIPAL DIVISION Leslie Norwood Managing Director, Associate General Counsel, Co-Head of the Municipal Division Michael Decker Managing Director, Co-Head of the Municipal Division 16