Where Have All the Muni-Bond Dealers Gone?
- More than a fifth have shut or merged in the last five years
- Underwriting fees drop to seven-year low amid competition
A trader is reflected in a monitor as he works on the floor of the New York Stock Exchange.
Photographer: Jin Lee/BloombergThis article is for subscribers only.
The number of municipal-bond dealers declined in 2015 as shrinking underwriting fees, record-low trading and growing regulatory costs led firms to abandon the $3.7 trillion market or merge with larger competitors.
Guggenheim Securities closed its local-government bond business last month after profits shrank. In October, Bank of Montreal sold its division to Piper Jaffray Cos. And in June, Birmingham, Alabama-based Sterne Agee Group Inc. was purchased by Stifel Financial Corp., which acquired local rival Merchant Capital about five months earlier.