After several weeks of relatively high volume, municipal issuance isn’t cooling off just yet, with $7.37 billion expected to come to market, down only slightly from last week’s revised $7.71 billion.
“Volume is lighter than last week and it’s also more spread out — it’s not just two large deals — so I suspect deals will get a pretty good reception,” said Alan Schankel, managing director at Janney Capital Markets.
“As far as I can see, there are no billion-dollar deals, and there is more variety, more diversity and less volume pressure,” he added. “Generally, the muni market has been improving on a relative basis over the past week or so and I expect that trend to continue.”
California came to market last week with a $1.8 billion general obligation issue and while initial levels were aggressive, final pricing in yields saw bumps of nine to 18 basis points, Schankel wrote in a weekly note. But New York City’s Hudson Yards Infrastructure Corp. issued $1 billion and saw yields on final pricings fall five to eight basis points, he said.
This week’s negotiated calendar will see $5.86 billion, on par with last week’s revised $5.88 billion, according to Thomson Reuters. The competitive market will see $1.51 billion, down from last week’s revised $1.78 billion.
The biggest deal on the negotiated calendar comes from the Massachusetts School Building Authority Thursday.
The agency will issue $600 million of Series 2011B dedicated sales tax bonds with maturities ranging from 2012 to 2021.
There are also term bonds maturing in 2033, 2036, and 2041. The bonds are rated Aa1 by Moody’s Investors Services and AA-plus by Standard & Poor’s and Fitch Ratings. The lead underwriter is Barclays Capital.
The Chicago Transit Authority will issue $559.7 million in two parts. The first issue will consist of $455.8 million of sales tax receipt revenue bonds. The serial bonds have maturities ranging from 2021 to 2040. The second part will consist of $104 million of new-money and refunding capital-grant receipts revenue bonds.
Of those bonds, $58.8 million have maturities ranging from 2022 to 2029 and the remaining $45 million have maturities ranging from 2021 to 2029.
Wells Fargo is the lead book-runner and both retail and institutional orders are expected to be taken Wednesday.
The deal will “hopefully go well,” said a banker in North Carolina who is working on the deal. “Right now, a lot of the deal is subject to market conditions, so we are hoping for the best situation possible.”
California will come to market Wednesday with $500 million of economic recovery refunding bonds. Underwritten by Barclays, the bonds are rated Aa3 by Moody’s, and A-plus by Standard & Poor’s and Fitch.
Catholic Healthcare West will issue $476 million in two parts. Almost $350 million will be offered by the California Health Facilities Financing Authority as Series 2011A revenue term bonds. The Arizona Health Facilities Authority will issue $126 million of Series 2011B revenue term bonds.
The lead book-runner is JPMorgan. The bonds are rated A2 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch.
In the competitive market, Tuesday will see Illinois sell a $300 million sales tax refunding deal. The bonds are rated AAA by Standard & Poor’s and AA-plus by Fitch. On Wednesday, the Port Authority of New York and New Jersey, rated Aa2 by Moody’s and AA-minus by Standard & Poor’s and Fitch, will come to market with $400 million of refunding bonds.
