Sales of U.S. municipal bonds saw their weakest August in more than a decade, as cities, states and authorities brought $20.57 billion of debt to market, according to preliminary Thomson Reuters estimates released on Friday.
That was the smallest issuance for August since 2000, when borrowers only sold $16.59 billion in bonds, according to Thomson Reuters data.
Altogether, this month's sales were the lowest since January 2012, when $17.11 billion of municipal bonds were issued.
Rising interest rates in the secondary market and fears about credit risk have cooled issuers' fever to refinance and made them wary of new borrowing.
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More than halfway through 2013, total issuance is running 12.2 percent below last year, with an estimated $218.94 billion of new and refunding bonds sold for the year ended Aug. 30, compared to $249.43 billion in the same period in 2012.
There were only 740 deals this August, compared to 995 deals totaling $31.28 billion in August 2012.
For refinancing, $8.85 billion of refunding bonds were sold in 227 deals this month. That was the lowest since May 2011 and less than half the $18.87 billion sold in 509 deals in August 2012.
Over the last two years, issuers had rushed to take advantage of historically low interest rates and refinancing crested at $27.27 billion in June 2012.
New debt sales in August were also below a year ago, with $11.71 billion of debt issued this month compared to $12.41 billion in August 2012. But the number of deals rose to 512 from last year's 486, suggesting that issuers are trying to keep their borrowing low.