Municipal bond deals will be almost as scarce as Thanksgiving leftovers this week when traders, underwriters, and investors take a holiday hiatus and volume dips to less than $1 billion.
"It'll just be extremely quiet and will die down," a New York trader said Friday. "Some issuers will price a few deals on Monday and Tuesday to avoid Wednesday, and then that's about it."
The bond markets are closed on Thanksgiving and have a recommended 2 p.m. close on Friday.
Ipreo LLC and The Bond Buyer estimated that volume will fall to an estimated $911 million, from the revised $6.97 billion that actually came to market heading into this week, as reported by Thomson Reuters. A reported $7.9 billion was originally expected.
A sale of $70 million of Kentucky pollution control revenue bonds will lead off the week's activity on Monday.
The deal consists of $35 million of Louisville/Jefferson County, Ky., Metropolitan Government PCRs, and $35 million of Trimble County, Ky., PCRs. Bth series are structured to mature in 2027 and will be priced at par and subject to a mandatory put in 2018.
The deal is being sold on behalf of the Louisville Gas & Electric Co. project, and the bonds are rated A1 by Moody's and A-minus by Standard & Poor's.
The largest deal of the week will hail from the Midwest, when the Illinois State Toll Highway Authority sells $270 million of toll highway senior revenue refunding bonds.
"Like every year, it's always quiet," said another New York trader. "This year it's already quiet to start out because rates are so low."
The Illinois deal is a far cry from the $550 million Connecticut general obligation deal that dominated the primary market last week. Some of those securities were designated as "green bonds," as they were devoted to funding clean water projects across the state.
The longest 2034 maturity from the $240 million Series F in the Connecticut deal was priced on Thursday with a 4% coupon to yield 3.59%, when the benchmark, triple-A GO scale in 2034 yielded 2.79%, according to Municipal Market Data.
This week's Illinois deal is structured to mature serially from 2018 to 2025 and will be priced on Tuesday by Siebert Brandford Shank & Co.
The bonds are rated Aa3 by Moody's Investors Service, and AA-minus by Standard & Poor's and Fitch Ratings.
In other activity, a $110.97 million sale of GO refunding bonds is being prepped for sale by the McHenry County, Ill., Conservation District on Tuesday.
Rated A1 by Moody's and AA-plus by Standard & Poor's, the bonds are structured to mature serially from 2015 to 2027 and will be priced by BMO Capital Markets Inc.
Also on Tuesday, Hudson County, N.J. is set to price $74 million of double-A-rated GO bonds in the competitive market.
Upon returning from the holiday, the week of Dec. 1 will likely be a slow crawl - with the largest deal on the calendar so far being a $51.15 million Southern California Metro Water District GO sale slated for Dec. 2.
"Maybe things will pick up after that, but it will be a short-lived two weeks and then it will come to a screeching halt again" as the market returns to holiday mode for the Christmas and New Year's hiatus, the second New York trader said.
