July 2 (Reuters) - U.S. municipal bond sales totaled $191.7 billion in the first half of 2012, up 69 percent from the same period in 2011 as states, cities and other issuers took advantage of low interest rates to refund outstanding debt, according to Thomson Reuters data on Monday.
Bond refundings accounted for 63.3 percent or $121.4 billion of issuance, up 130.6 percent from the first half of 2011. Me anwhile, yields hit all-time lows on Municipal Market Data's benchmark triple-A scale ear lier this year.
Chris Mauro, director of municipal bond research at RBC Capital Markets, said interest rates are expected to stay low for the rest of 2012.
"There is no reason to believe refunding activity will diminish," he said.
Bank of America Merrill Lynch was the top underwriter so far this year with 242 deals totaling just over $26 billion. Citigroup came in second, with 254 deals totaling $22 billion, and J.P. Morgan Securities <JPM.N > was third, with 189 deals totaling $21.5 billion, according to the data.
The New York State Dormitory Authority was the top debt issuer at $3.89 billion. Illinois was next at nearly $3.6 billion, followed by the Michigan Finance Authority at $3.45 billion. The Michigan authority also sold the biggest long-term bond issue so far this year - $2.9 billion of unemployment obligation assessment revenue bonds in June, Thomson Reuters reported.
There were 15 long-term deals topping $1 billion in the $3.7 trillion muni market this year, with nine of them in the second quarter.
June was the biggest month so far for issuance at $42.7 billion.