Bloomberg: Guam Pays the Most to Tap Muni Bond Market

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Bloomberg

Guam – Bloomberg’s Municipal Markets Brief reports that Guam pays more than any other U.S. state or territory to access the Municipal Bond Market.

Highlights of the Brief are printed in Wednesday’s edition of the San Francisco Chronicle online which reports:

Read the Bloomberg report cited by the San Francisco Chronicle

* Guam paid the most to tap the municipal bond market: $126,800 per $10 million.

* It cost Nebraska issuers an average of $114,000 to sell the same $10 million in bonds.

* Issuers in Delaware paid the least, only $49,200 per $10 million borrowed.

The paper also reports that the average underwriting cost across the entire municipal market was $6.43 per $1,000 bond.

The results reported by Bloomberg are based on the average cost of selling bonds by state, using the cost of issuance and underwriter discount disclosed in official statements, weighted by transaction size and expressed as a percentage.

Delaware Borrowers Sell Debt at Lowest Cost as Guam Tops List

June 9 (Bloomberg) — Delaware municipal-bond issuers borrowed at the lowest cost in 2010 while the U.S. territory of Guam paid more than twice as much, Bloomberg Brief: Municipal Markets reported today.

Issuers in Delaware paid $49,200 per $10 million borrowed, or $4.92 per $1,000 bond, according to data compiled by Bloomberg. It cost Nebraska issuers an average of $114,000 to sell the same $10 million in bonds. Guam, which is also authorized to sell municipal bonds, paid the most to tap the market: $126,800 per $10 million.

Data cited in the newsletter show the average cost of selling bonds by state, using the cost of issuance and underwriter discount disclosed in official statements, weighted by transaction size and expressed as a percentage.

The average underwriting cost across the entire municipal market was $6.43 per $1,000 bond, the data show. The information on underwriting costs was collected from long-term, fixed-rate transactions sold in 2010.

Not all municipalities break out data on costs of issuance.

–With assistance from Sowjana Sivalognathan in New York. Editors: William Glasgall, Walid El-Gabry

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