Back to School: An Education Themed Week on Tap

bb032315week.jpg

Municipal bond volume will exceed $8 billion for the 11th straight week as issuers take advantage of favorable borrowing costs to sell a $1.7 billion tobacco settlement bond and raise money for education.

Volume for the week of March 23 is estimated at $8.9 billion, according to Ipreo and The Bond Buyer, including $6.4 billion of negotiated deals and $2.5 billion of competitive sales.

The yield on the 10-year benchmark muni general obligation was down one to three basis points from 1.97% on Thursday, while the yield on 30-year GO fell as much as two basis points from 2.77%, according to a read of Municipal Market Data's triple-A scale on Friday afternoon.

At the start of the week of March 16, the yield on the 10-year stood at 2.12% and the yield on the 30-year was at 2.93%.

"The buy side doesn't like lower yields; but it appears there is still a lot of cash out there, even if some of the deals struggle a little bit," said a Texas trader. "It has been a while since yields have been this low, so it will be an interesting test to the market."

As spring break season winds down, school is in session for the muni market, as nine of the 12 biggest negotiated issues for the week of March 23 are education related.

Topping the calendar is the $1.7 billion tobacco bond deal from California's Golden State Tobacco Securitization Corp. The deal, scheduled to be priced by Citigroup Global Markets on Tuesday after a one-day retail order period, is rated A1 by Moody's Investors Service, AA by Standard & Poor's and A by Fitch Ratings.

Also slated is the Virginia College Building Authority's $643 million Series 2015 A, B and C bonds scheduled to be priced by JPMorgan Securities on Thursday after a one-day retail order period. The bonds are scheduled to mature serially from 2016 to 2035. The deal is rated Aa1 by Moody's Investors Service and AA-plus by both Standard and Poor's and Fitch Ratings.

Northeast independent school district in Texas is coming to market with $390 million of unlimited tax refunding bonds, that are expected be priced by Citigroup on Wednesday. The deal is rated Aaa by Moody's and triple-A by S&P.

JPMorgan is expected to price Fort Worth Independent School District's $271.105 million of Series 2015 bonds on Tuesday. The debt is scheduled to mature serially from 2016 to 2040 and is rated Aaa by Moody's and triple-A by S&P.

"Both the Northeast and Fort Worth ISD bonds are backed by the permanent school fund and PSF bonds have historically performed well," the Texas trader said. "Due to the good credit nature of PSF, there should be good appetite for those two deals, especially with the good names and the fact that they are very liquid."

Morgan Stanley plans to price San Francisco community college district's $250 million of 2015 general obligation refunding bonds for the city and county of San Francisco. The deal is rated A3 by Moody's and A by S&P.

Topping the competitive slate are two separate sales on Wednesday from Anne Arundel County, Md., totaling $384 million. The first sale consists of $269 million of general obligation bonds comprised of $191.4 million consolidated general improvement Series 2015 and $77.6 million consolidated water and sewer Series 2015. Also scheduled are $115 million GO refunding Series 2015 consisting of $62.8 million consolidated general improvements and $35.755 million consolidated water and sewer bonds and $16.14 million consolidated golf course projects. The bonds are rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.

As the University of Kentucky men's basketball team tries to complete its undefeated season with an NCAA tournament title, the muni market will be waiting to see who wins UK's three competitive issues totaling $282 million that will be going up for bidding on Tuesday.

The largest issue is $149 million series A of general receipts refunding bonds, second is $111 million Series B of general receipts refunding bonds and lastly is $22 million Series C of general receipts refunding bonds. All three issues are rated Aa2 by Moody's and AA by S&P.

The third largest deal up for bidding will take place on Tuesday, on an offering from South Broward hospital district totaling $165.07 million of hospital revenue and refunding revenue bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P.

For reprint and licensing requests for this article, click here.
Buy side
MORE FROM BOND BUYER