Investors will celebrate a $3 billion boost in volume this week, highlighted by a large, well-known New York credit, following the seasonally-light first official week back to market.
"People usually can't do anything the first week and it's hard to start right out of the gate, so I think they will be playing catch up with the deals that were on the sidelines," a New York underwriter said of the this week's estimated supply of $7.27 billion, as reported by Ipreo and The Bond Buyer.
The municipal market welcomed the New Year last week with a revised $4.03 billion as reported by Thomson Reuters, including the $1 billion general purpose state personal income tax revenue bonds from the Dormitory Authority of the State of New York.
Headlining this week's activity is a $750 million sale of tax-exempt, fixed-rate new money building aid and revenue bonds from the New York City Transitional Finance Authority. Ramirez & Co. is expected to price the deal on Wednesday, following a two-day retail order period.
The deal is structured to mature serially from 2016 to 2044.
On the West Coast, King County, Wash., is set to bring two separate deals to market. The larger of them is a $560.5 million sale of sewer revenue bonds structured to mature serially from 2016 to 2047 and be priced by JPMorgan Securities LLC on Monday.
The bonds are rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's.
The county is also expected to sell $250 million of limited tax general obligation bonds in a JPMorgan-led deal structured with serial bonds maturing from 2016 to 2038, also pricing on Monday.
Those bonds are rated Aa1 by Moody's and AAA by Standard & Poor's.
The Illinois Finance Authority is also gearing up a $502 million sale of revenue bonds on behalf of the Rush University Medical Center Obligation Group.
The sale, which is structured to mature serially from 2015 to 2034 with one term bond in 2039, is slated to be priced by Goldman, Sachs & Co. on Monday.
In New York, the Metropolitan Transportation Authority is prepping a $400 million sale of revenue bonds that are rated A2 by Moody's, AA-minus by Standard & Poor's, and A by Fitch Ratings.
JPMorgan will price the issue on Monday with a structure of serial bonds maturing from 2015 to 2042.
The large deals should get hearty demand.
"It seems like the market has an appetite for it," the New York underwriter said. "Deals did well this week so I don't see any reason why the trend wouldn't continue?" he said on Friday as it was reported that the U.S. unemployment rate declined again in December.
The rate fell to 5.6%, its lowest level since mid-2008, according to the monthly Bureau of Labor Statistics report. The American economy also added 252,000 jobs in December, slightly more than the 240,000 consensus expectation, according to the report.
Last week's DASNY deal was the first large deal to debut in the New Year. Barclays Capital priced the bonds to yield 1.46% with a 5% coupon in 2020 to 3.28% in 2036 with a 3 ¼% coupon, as yields fell.
The DASNY deal's presence was rare since the first week of the year is typically lackluster, the New York underwriter said. Last year, Ipreo LLC and The Bond Buyer called for an estimated $1.79 billion in the week of Jan. 6. Thomson Reuters later revised the week's volume to $1.825 billion.
In other large deals coming this week, Oregon Department of Transportation will sell $378.96 million of tax-exempt highway user tax revenue, senior-lien revenue refunding bonds.
Morgan Stanley & Co. is slated to price the offering on Thursday, following a retail order period on Wednesday, with a structure of serial bonds maturing from 2015 to 2033.
The bonds are rated Aa1 by Moody's, AAA by Standard & Poor's, and AA-plus by Fitch.
