Municipal bond sales totaled $27.48 billion, spread over 673 deals, the largest monthly issuance since last July and nearly twice the $14.57 billion sold in 660 deals in February.
Still, that was 12.4 percent below March 2013, when $31.35 billion came to market in 936 deals.
Moreover, the total for the first quarter of 2014, $60.27 billion in 1,941 sales, was 26 percent lower than issuance in the first quarter of 2013, $81.3 billion spread over 2,782 sales. It was also the lowest first-quarter total since 2011.
Even with the Puerto Rico sale, which was almost entirely refunding, issuance hit the lowest level for March since 2011. In March, bond refundings totaled $17.89 billion in 317 deals, compared to $18.65 billion sold in March 2013 through 570 deals.
New debt sales were also low in the month, $9.58 billion in 356 deals, compared to $12.7 billion in 366 deals in March 2013.
The bigger picture of the quarter shows that debt refinancing, which had dominated the primary market in 2012 and part of 2013, continues to dry up.
Refundings for the quarter were 41.8 percent below the first quarter of 2013, with a total of $30.05 billion coming to market in 824 deals.
New money deals, on the other hand, were 2 percent higher than the first quarter of 2013 at $30.21 billion in 1,117 deals.
After scraping record lows, municipal bond yields have shot up over the last year and ended the era of cheap refinancing.
On Friday, yields on top-rated 10-year bonds were 2.47 percent and those on highly rated 30-year bonds were 3.63 percent on Municipal Market Data's benchmark scale.
A year earlier, yields were significantly lower for both maturities at 1.91 percent in 10 years and 3.09 percent in 30 years, according to MMD, a Thomson Reuters company.
Still, of late, yields have begun to drop during the most recent quarter, falling 32 basis points for bonds due in 10 years and 57 basis points in 30 years.