Volume will continue to increase, though it will remain on the lighter side in the week after the U.S. government shut down.
According to Ipreo LLC and The Bond Buyer, volume will increase to $3.763 billion. That compares with the revised $2.786 billion that issuers actually priced last week, according to Thomson Reuters, and is still well under this year’s weekly average of $5.5 billion.
Traders said they expect last week’s sluggish mood in the municipal market to continue this week with the arrival of skimpy supply.
“Munis are lightly traded and prices are flat on the day,” Dave Manges, first vice president of municipal trading at BNY Mellon Capital Markets, said on Friday. “The aggregate supply [for next week] is rumored to be light and that’s what’s driving the muni market at the moment.”
A $594 million Wisconsin general obligation sale will debut as the largest deal this week when a syndicate led by Citi prices the three-pronged offering on Thursday.The deal consists of $225 million of tax-exempt paper maturing serially from 2018 to 2025; $185 million of taxable debt maturing serially from 2014 to 2018, and an additional $184 million of forward-rate bonds maturing from 2014 to 2020.
Last week’s largest deal -- a $898.5 million financing of general airport senior-lien revenue and refunding bonds for Chicago’s O’Hare International Airport -- was priced by JPMorgan Securities LLC with yields to grab investors’ attention.
The final 2044 maturity on the bonds subject to the alternative minimum tax priced at 5.57% with a 5.50% coupon, while the final 2044 maturity in one of the non-AMT series was priced to yield 5.22% with a 5% coupon.
This week’s handful of other sizable deals includes a $434.2 million sale from Broward County, Fla., of airport system revenue bonds structured as a three-pronged deal being senior-managed by JPMorgan Securities LLC on Tuesday.
Rated A1 by Moody’s Investors Service, A-plus by Standard & Poor’s, and A by Fitch Ratings, the bonds are structured as $164.5 million of Series A bonds subject to the alternative minimum tax; $55 million of Series B non-AMT bonds; and $214.2 million of Series C non-AMT bonds.
Oregon Department of Transportation will issue $405.9 million of senior-lien highway user tax revenue bonds via a negotiated pricing on Wednesday by Morgan Stanley & Co. LLC. The bonds are rated Aa1 by Moody’s, AAA by Standard & Poor’s, and AA-plus by Fitch.
In the Midwest, the City of Colleges of Chicago Community College District Number 508 will sell $250 million of unlimited tax GO bonds. Rated AA by Standard & Poor’s and AA-minus by Fitch, the deal is expected to be priced on Tuesday by Jefferies LLC.
In the competitive market, a two-pronged GO financing from Washington is planned for Thursday. The deal consists of two series -- $120.67 million and $108.28 million.
