Lebenthal Exits Muni Underwriting to Focus on Individuals

Lebenthal & Co. will cease underwriting U.S. municipal-bond offerings and selling to institutions to focus on dealings with wealthy individual clients.

“We made a decision to go back to our roots and focus on high-net-worth sales to individual retail accounts,” Alexandra Lebenthal, the New York-based company’s president, said in an e-mail. “In looking at everything in the last couple of months, it became really clear where our focus should be.”

Underwriting opportunities are diminishing with the municipal-bond market shrinking by about $10 billion last quarter as local governments cut borrowing for public works. The amount of municipal debt dropped to $3.66 trillion as of March 31, the least since 2009, according to Federal Reserve data. States and localities have issued $123 billion this year, down from $155 billion in the corresponding period of 2013.

The firm’s exit was reported earlier today by the Bond Buyer.

The original Lebenthal & Co., started in 1925, became known for television and radio advertisements encouraging investors to buy state and local-government bonds under the leadership of James Lebenthal, Alexandra’s father. He said in a June 13 Bloomberg Radio interview that the muni market is in a “deep freeze.”

Alexandra and James Lebenthal revived the company name in 2008. The brand had ceased being used three years earlier when Merrill Lynch & Co., now part of Bank of America Corp., acquired the business from Mony Group Inc.

To contact the reporter on this story: Brian Chappatta in New York at bchappatta1@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Alan Goldstein, Mark Tannenbaum

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