States and cities will borrow about $340 billion in 2012 as investors receive about $320 billion in interest and principal from previously issued bonds, said Chris Mauro, head of U.S. municipal strategy at RBC Capital Markets.

The issuance projection is almost 20 percent higher than the $285 billion that he said municipalities are set to borrow this year. The money coming back to investors may increase as issuers refinance debt, Mauro said today in the New York offices of Bloomberg News.

“That matches pretty nicely with our call of $340 billion in issuance, so the market from a technical perspective is pretty well set up for next year,” said Mauro, whose firm is the investment-banking arm of the Royal Bank of Canada.

The $340 billion of issuance will include $240 billion of new bonds and $100 billion of refunding deals, if “the interest-rate environment continues to exist as it is, at a very low level,” Mauro said.

Benchmark 10-year municipal yields were 1.94 percent today, the lowest since the Bloomberg Valuation index began in January 2009. Rates on top-rated tax-exempt debt maturing in 2041 were 3.73 percent, down from a four-month high of 3.94 percent on Dec. 2, Bloomberg data show.