The institutional trading arm of Fidelity Investments, Fidelity Capital Markets (Fidelity), reported that it participated in a record number of new municipal bond issues for the first three quarters of 2010. Fidelity participated as an underwriter or in the selling group of 85 new negotiated issues of municipal bonds, up 57% over the first nine months of 2009, according to a company statement on Wednesday.
The face value of the bonds was $37.42 billion, the announcement stated. Fidelity is “currently ranked 12th by Thomson Reuters for negotiated co-managed muni underwriting,” said spokesman John Eidson in an e-mail message to AdvisorOne.com.
“U.S. households surpassed the $1 trillion mark in muni ownership earlier this year,” Patrick Sweeney, senior vice president and manager of Fixed-Income Trading for Fidelity Capital Markets, stated in the announcement. “With an aging population and the prospects for higher taxes in the near future, we expect demand to continue growing.”
Fidelity’s participation included both tax-free municipal bonds and 34 taxable municipal Build America Bond deals. Fidelity had underwritten 16 Build America Bond issues in 2009. For more details on Build America Bonds, please see “Forecast for Municipal Debt,” and “How are Build America Bonds Working?”
Fidelity has expanded its participation in new issues of municipal bonds by bringing in more talent for its public finance group, adding “five bankers over the last two years,” the announcement stated. “Having our own public finance group enables Fidelity to participate directly in municipal new issues as an underwriter or selling group member, giving us hands-on insight that we can bring directly to our clients,” stated Sweeney.