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Goldman Makes Late Entry in Retail Munis

Goldman Sachs, a laggard in muni bonds underwriting, will target retail investors in the market.
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Goldman Sachs

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is making its entry into the retail side of municipal bonds well behind the bank's major competitors.

Goldman and

Incapital LLC

announced a deal Wednesday in which Incapital will distribute municipal bonds underwritten by Goldman.

Retail investors buy the bulk of municipal bond offerings and issuers increasingly demand that underwriters have access to retail distribution networks. Goldman tends to stay out of the retail arena, and as a result has lagged competitors.

This year, it is sixth among municipal bond underwriters, behind

JPMorgan Chase

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Bank of America

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Morgan Stanley

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Barclays PLC

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according to

Thomson Reuters

(see accompanying chart).

The municipal bond market has had its troubles of late. Harrisburg, Pa. is expected to miss a $3.3 million bond payment, and last month the Securities and Exchange Commission charged the state of New Jersey with making misrepresentations on more than $26 billion in bonds it sold from 2001 to 2007.

Despite these and other troubles, "the muni market if anything in last two years has appeared to become more attractive to retail investors," says Paul Maco, partner at Vinson & Elkins who earlier in his career was the SEC's first director in the Office of Municipal Securities.


Written by Dan Freed in New York


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