Municipal bond dealers close or merge as underwriting fees shrink

New York

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 US$3.7 trillion market or merge with 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 was purchased by Stifel Financial Corp, which acquired local rival Merchant Capital about five months earlier.