Municipal Securities Market Statistics

March, 2012:

How to Understand Municipal Securities Market Statistics:

In our continued effort to educate the investing public about various aspects of the securities markets, we are providing the below information. Because this information is being provided for educational purposes only, it should not be relied upon as providing legal or investment advice. Moreover, it is not intended to be complete in all material respects. If you have any questions concerning the information set forth below, you should contact a qualified professional.

Before purchasing and upon receipt of the confirmation confirming the purchase of a municipal security, make sure that you understand and confirm all of the information set forth below. This information will help you determine whether or not a particular transaction is in line with your investment objectives and help you confirm that you actually purchased what was represented to you.

The Market Statistics pages provide a summary of municipal securities transaction activity for all published trades disseminated by the Municipal Securities Rule Making Board (MSRB) for every trading day since May 15, 2006. The information reflects trading activity at the end of each trading day as reported to the MSRB’s Real-Time Transaction Reporting System (RTRS). Trading data can be viewed for a single day or for a range of days. Market statistics may be updated for up to 20 days after the trade date to account for modifications, cancellations, trades reported late or any other changes to the underlying characteristics of the securities.

Trading data is not available for weekends and certain holidays. Dollar amounts are displayed in millions. Additionally, all amounts and percentages may not add up due to rounding.

A “mouse over” function, on the website, displays underlying information and data for certain graphs when the cursor pauses or hovers over a particular area of the graph.

The statistics pages include the following information:

Trade Summary:

An overview of trade activity for a particular day or a range of days, including statistics on par amount and number of trades by trade type:

• Inter-dealer – a municipal securities trade between two broker-dealers, including dealer banks or broker’s brokers.
• Customer Bought – a municipal trade in which a customer bought the security from a broker-dealer or bank.
• Customer Sold – a municipal trade in which a customer sold the security to a broker-dealer or bank.

Data does not include purchases of securities by underwriters from issuers.

Average Number of Trades:

A simple daily average of number of trades for different types of trades, including interdealer, customer bought and customer sold trades, excluding weekends and holidays.

Average Par Amount:

A simple daily average of par amount traded for different types of trades, including interdealer, customer bought and customer sold trades, excluding weekends and holidays.

Overall Trading Activity:

For a date range search, historical graphical illustrations of number of trades and par amount will be displayed as well as a simple daily average for all trading days within that range, excluding weekends and holidays.

Par Amount by Trade Type:

For a date range search, historical graphical illustrations of par amount traded for different types of trades, including inter-dealer, customer bought and customer sold trades, excluding weekends and holidays. Additionally, a simple daily average for all trading days within that range is provided.

Number of Trades by Trade Type:

For a date range search, historical graphical illustrations of number of trades for different types of trades, including inter-dealer, customer bought and customer sold trades, excluding weekends and holidays. Additionally, a simple daily average for all trading days within that range is provided.

Par Amount and Number of Trades by Trade Size:

Par amount of municipal securities transactions and number of trades in a range of transaction sizes. The following transaction sizes are currently available:

• $100,000 or less
• More than $100,000 to $500,000
• More than $500,000 to $1,000,000
• More than $1,000,000.

Par Amount Traded for Most Active Sectors:

Par amount of municipal transactions according to the security’s use of proceeds, issuer’s intended use of the capital raised by the offering, according to definitions provided by Standard & Poor’s Securities Evaluations, Inc. The top seven most active sectors based on par amount are displayed, as well as an “Other” category that includes the remaining sectors and trades for which the sector information was not available.

Par Amount Traded by Remaining Maturity:

Par amount of municipal transactions based on the time remaining between the trade date and the stated final maturity date of the security. Please note that the remaining maturity does not take into account possible call and put options and rate reset frequencies as is the case with certain types of variable securities, such as auction rate securities and variable rate demand obligations. The following remaining maturity ranges are currently available:

• One year or less
• More than one year to five years
• More than five years to ten years
• More than ten years to twenty years
• More than twenty years

Par Amount Traded Based on Source of Repayment:

Par amount of municipal transactions based on the source pledged by the issuer for repayment of the securities, according to definitions provided by Standard & Poor’s Securities Evaluations, Inc. If no information is available, “Not Available” will be displayed.

• Revenue – a security that is payable from a specific source of revenue and to which the full faith and credit of an issuer with taxing power is not pledged. Revenue bonds are payable from identified sources of revenue and do not permit the bondholders to compel taxation or legislative appropriation of funds not pledged for payment of debt service.
• General Obligation – a security that is secured by the full faith, credit and taxing power of an issuer. General obligation securities issued by local units of government are typically secured by a pledge of the issuer’s “ad valorem” taxing power; general obligation securities issued by states are generally based upon appropriations made by the state legislature for the purposes specified.
• Double Barrel – a security with characteristics of both revenue and general obligation instruments.

Par Amount Traded by Coupon Type:

Par amount of municipal transactions based on the different type of interest rate (coupon) of a security:

• Fixed Rate – An interest rate on a security that does not change for the remaining life of the security.
• Variable Rate- An interest rate, sometimes referred to as a “floating rate,” on a security that changes at intervals according to market conditions or a predetermined index or formula.
• Zero Coupon – An original issue discount bond on which no periodic interest payments are made but which is issued at a deep discount from par, accreting (at the rate represented by the offering yield at issuance) to its full value at maturity.
• Coupon type data not available prior to October 2007.

Most Active Municipal Securities:

List of the ten most active municipal securities based on the number of trades, excluding variable rate and zero coupon securities. Trading information for the 10 most active securities can be displayed for a single day or a set period of time (weekly, monthly or yearly). The following information is provided for the most active municipal securities:

• CUSIP – shows the CUSIP9 number for the securities. Trade data is not available for any municipal securities that do not have CUSIP9 numbers.
• Security Description – shows the name of the issuer and the issue description. Together, this is the full name of the bonds, using industry-standard abbreviations for the security description. It also shows the securities’ dated date (i.e., the date from which interest on the issue usually starts to accrue).
• Maturity Date – shows the date on which the principal amount of the bonds becomes due. Interest Rate – shows the stated interest (or “coupon”) rate of the securities for fixed-rate securities.
• Average Price – shows the simple average price for all transactions for a particular day at which the securities were purchased, expressed as a percentage of the principal amount of the securities.
• Average Yield – the simple average yield for all transactions for a particular day, based on a “yield to worst,” that the customer may realize on an investment in the bonds based on the principal amount of the trade, the interest rate on the bonds, and the remaining period until maturity or earlier redemption.