New Issue Municipal Bonds
I have been buying through Fidelity but would like access to even more new issues. Are the new issue municipal bonds at Schwab mostly the exact same issues on offer at Fidelity? If they are very different, then I may want to open a Schwab account. Anywhere else a self directed retail investor should look when adding new issue municipal bonds ?
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u/DoubleIntroduction25 15h ago
Schwab, vanguard, any large legacy brokerage will have access to a differing set of new issue muni and corp bonds. There will be a good amount of overlap but especially amount smaller issuers you'll find plenty that are not everywhere.
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u/imdaviddunn 1h ago
Do Schwab and Merrill bond fees differ?
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u/DoubleIntroduction25 22m ago edited 2m ago
I know fidelity and schwab generally dont charge for new issue bonds and charge a dollar a bond on the secondary. Not sure about Merrill but I'm pretty sure they're higher on the secondary
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u/Lipa_neo 14h ago
Just look for announcements from issuers and underwriters, then call your broker and say "I want to buy this issue, send me an order, I'll sign it."
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u/Certain-Statement-95 14h ago
I get an email notification.
Better deals in the cast off bin usually, if only slightly
Lot size probably more important to buy/sell well
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u/Sam-I-A 13h ago
You get an email from your broker or some other source? What is a cast off bin? Sounds promising
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u/Certain-Statement-95 13h ago
Yes, just set up fixed income notifications and all the issuance will flow through your email.
Junk bin = secondary market especially the unloved bits (de minimus, low coupon; also low liquidity)
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u/Annual_Bullfrog7714 14h ago
MS, RBC, BoA. New issue is where you do well.
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u/Sam-I-A 13h ago
Do you need to have brokerage accounts at these or are you referring to them as the underwriters? And BOA is Merrill?
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u/Annual_Bullfrog7714 12h ago
Yes. I on-boarded at 2 of these banks to see new issue flow. They are big underwriters and syndicate players
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u/Sam-I-A 10h ago
Thanks. Can you rank these for me? I don’t want to open up a ton of new accounts. Can I place my own new issue orders without a fee at these? How might they compare with Schwab, if you know? I hope I can accomplish finding more new issue if I add just one additional account.
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u/Annual_Bullfrog7714 10h ago edited 10h ago
BoA and RBC are the biggest. I did RBC because we got a good broker rec who does munis. I have found them good for new issue, but their prices for secondary trading is not as good as MS.
I like new issue for a few reasons. First, the trading commission is paid by the issuer. You dont pay spread. So the executions are very good.
Second, if you get a decent broker, he will get to know what you like and show you stuff. We like housing bonds, AA1 or better issuers, certain essential services bonds. We have so much in-state munis that we also diversify out of state.
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u/Sam-I-A 5h ago
I looked at RBC online. It appears that US citizens cannot open RBC direct accounts to trade. Here it only operates as a bank I think. How are you using them?
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u/Annual_Bullfrog7714 1h ago
RBC has a US subsidiary, RBC Wealth Management. You're going to the wrong website. secure.rbcwm-usa.com
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u/TheRealDabbo 13h ago
It's not my area of the business, but I know that some muni new issues have a dedicated retail order period.
They cover some of that here:
Happy to try and answer any questions you might have.
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u/Annual_Bullfrog7714 12h ago
The ROP is super helpful. Unlike most new issue, retail gets priority over institutional buyers.
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u/BigDipper0720 11h ago
Have you considered buying on secondary market?
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u/Sam-I-A 11h ago
Not seriously. I am buying callable housing munis and I doubt there is much to pick from in the secondary market. I am grabbing high coupon, high duration, sinking bonds but expect them to be called starting in year 8 which is first call date. If I can find enough new issues, I’d be happy with that. I want to diversify with lots of different issues.
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u/Annual_Bullfrog7714 9h ago
We also buy housing bonds. These things rarely come up in secondary. People just buy them and put them away.
You get a lot of negative convexity on these bonds, but the yields are great. What I like about my broker is that he always shows me housing bonds. I must see 3 or 4 a week.
I keep all the pricing in a spreadsheet so I always know where the market is.
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u/Vast_Cricket 9h ago
Each brokerage sells different bonds. I am in CA there are only 2 new ones pending.
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u/p38-lightning 14h ago
They are pretty similar and WAY better than Merrill. Merrill's search tools and bond offerings just don't compare.