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Wall Street Muni Bond Fees Decline to Lowest Since 2004

States and localities are paying Wall Street banks the lowest fees in at least a decade to structure municipal-bond deals as dwindling issuance fosters competition between underwriters.

Average underwriting fees on debt sales in the $3.7 trillion municipal market this year are about $5.33 per $1,000 of bonds, the cheapest since at least 2004, data compiled by Bloomberg show. That’s down from a peak of about $6.90 in 2009, the first year of the taxable Build America Bonds program.