The New Jersey Transportation Trust Fund Authority will test the primary market this week with an $850 million long-term financing.
It is part of an increasing slate of new offerings that is expected to follow last week's $5.5 billion California note sale, which attracted demand amid market weakness as yields on long-term munis rose in sympathy with Treasuries.
According to Ipreo LLC and The Bond Buyer, issuers are expected to bring a combined $4.10 billion of negotiated and competitive offerings to the market this week, after a revised $3.81 billion priced last week, according to Thomson Reuters.
California's mammoth revenue anticipation note sale dominated most of the attention when it was priced by JPMorgan last Thursday and was oversubscribed by retail and institutional investors.
It achieved the lowest yields California has seen in four decades of RAN sales as the first series of $1.5 billion was repriced to yield 0.21% with a 2% coupon in 2014, and the second series of $4 billion priced to yield 0.23% with a 2% coupon in 2014.
Retail investors ordered $1.65 billion of the notes, and institutional investors -- largely money market funds -- ordered $8.6 billion, according to the Treasurer's office.
Officials at the New Jersey Transportation Trust Fund Authority and the New York State Dormitory Authority are hoping their deals can garner similar attention from investors when they share the spotlight as this week's largest deals. Both issues will be priced by Bank of America Merrill Lynch & Co.
The New Jersey deal's official pricing will take place Tuesday, following a one-day retail order period for the serial structure maturing from 2014 to 2044.
The bonds are rated A1 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch Ratings.
The State University of New York dormitory facilities revenue bonds will be priced on Thursday, following a Wednesday retail order period.
Rated Aa3 by Moody's and A-plus by the two other major rating agencies, the deal is structured with serial and term bonds. The maturities were still being finalized at press time.
The two credits should find buyers, according to Michael Pietronico, chief executive officer at Miller Tabak Asset Management, even though many investors are looking for bonds on the very short end of the yield curve and some remain concerned that the Federal Reserve Board will start tapering its bond purchases.
"Both credits are approved for purchase by many conservative investors and as such we would expect retail to have interest at various points in the yield curve, depending on the pricing," he said.
The deals come following some volatility after a rise in Treasury yields last Thursday translated into weakness on the municipal side.
Municipal yields rose as many as five basis points and the 10-year ended at a 2.85%, according to Municipal Market Data. The 30-year rose four basis points to 4.37% -- up nine basis points on the week, according to MMD.
"Miller Tabak Asset Management believes it is likely that the market will require a yield penalty on any significant issuance beyond 10 years on the yield curve until mutual fund flows turn positive and the Federal Reserve begins to taper its bond purchases," Pietronico said. "In fact, it is quite possible both of those events may actually occur very close in proximity as duration shedding by investors has little to do with inflationary concerns and everything to do with trying to play the 'taper.'"
The week's other sizable deals include a $322 million Columbus, Ohio, sale of various purpose unlimited and limited tax bonds by Bank of America on Tuesday, after a retail order period on Monday.
The natural triple-A-rated deal is structured with $296.56 million of tax-exempt debt and $24.92 million of taxable debt, but the maturity structure was unavailable at press time.
