Call it the calm after the storm of taxable Build America Bond issuance.

The bulge of billion-dollar deals in the market in recent months due to the flood of BAB issuance since April will come to a sudden halt this week as volume slows to an estimated $2.49 billion leading into the Labor Day holiday, according to Ipreo LLC and The Bond Buyer.

"The municipal market will continue to easily absorb next week's supply as the absence of participants due to possible vacations does little to defer the strong inflows of cash that continue to look for bonds," said Michael Pietronico, chief executive officer of Miller Tabak Asset Management in New York City. "If the market opened for business on Saturday and Sunday, there would be buyers looking for tax-free bonds."

The largest deal headed to market this week is expected to be a $375 million offering of water revenue bonds from the San Francisco Public Utilities Commission. It will be California's second largest competitive sale of the year, but represents a stark difference from the $901.6 million sale of prepaid gas revenue bonds from the state's M-S-R Energy Authority that dominated the new-issue slate of $4.13 billion last week, according to Thomson Reuters.

The energy deal's 2039 final maturity, rated A by Standard & Poor's and A-plus by Fitch Ratings, was priced with a 6.70 % yield. That was 247 basis points higher than where the benchmark 30-year Treasury bond ended Thursday when the deal was priced by Citi, and 223 basis points higher than the generic triple-A general obligation scale in 2039, according to Municipal Market Data.

This week's San Francisco deal, which is planned for bidding tomorrow, will carry ratings of A1 from Moody's Investors Service and AA-minus from Standard & Poor's and will be structured to mature from 2011 to 2039. The PUC previously sold $375 million of water revenue bonds on Aug. 11 as part of its ongoing $4.6 billion water system improvement plan.

"The California market has rebounded smartly over the last month or so and the San Francisco deal will benefit from [demand] by the many investors previously skeptical of credit quality within the state," Pietronico explained. "Higher tax-free municipal market prices have forced many to assume more risk than they were perhaps willing to a couple of months ago."

Elsewhere in California, a $125 million sale of general obligation bonds is expected from the Pasadena Unified School District. Comprised of $30.8 million of tax-exempt serial bonds, as well as $94.1 million of taxable, direct-pay BABs structured as serials and term bonds, the deal is expected to be priced tomorrow by RBC Capital Markets LLC and is rated Aa3 by Moody's and AA-minus by Standard & Poor's.

Meanwhile, activity in the negotiated market will center around a $313.1 million sale of taxable GO pension bonds from Waterbury, Conn. William Blair & Co. is expected to price the deal on Wednesday with a tentative structure that includes serials maturing from 2010 to 2019, a final term bond in 2038, and A-minus ratings from Standard & Poor's and Fitch.

Some of the week's other offerings hail from Ohio, Oklahoma, Florida, and New York.

A $209 million sale from the Oklahoma Capital Improvement Authority of state highway capital improvement revenue bonds is planned for pricing tomorrow by lead manager RBC after a retail order period today. Rated AA by Standard & Poor's and AA-minus by Fitch, the deal will consist of $152 million of tax-exempt highway bonds in Series 2009A that mature from 2010 to 2024, and $57 million of taxable, direct-pay BABs in Series 2009B that mature from 2020 to 2024.

In addition, a $170.3 million sale of state facility refunding bonds from the Ohio Building Authority is slated for pricing by RBC on Wednesday, following a retail order period tomorrow.

The issue will be comprised of $82 million of Series 2009B bonds for administrative building fund projects, $72.2 million of Series 2009B bonds for adult correctional building fund projects, and $16 million of Series 2009B bonds for juvenile correctional building fund projects, and is structured to mature from 2010 to 2024. Bonds are expected to be rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.

In the Southeast, a $139 million offering of water and sewer revenue bonds is on tap from Pasco County, Fla., with the pricing expected on Wednesday by senior manager Morgan Keegan & Co.

The larger portion of the deal is comprised of $115.5 million of taxable, direct-pay BABs that are structured to mature in 2024, 2029, 2034, and 2039, while the tax-exempt portion consists of $23.5 million of serial bonds maturing from 2013 to 2021. The Pasco bonds are rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.

Meanwhile, Nassau County, N.Y., is gearing up for a three-pronged sale of general improvement bonds totaling $130.4 million in the competitive market on Wednesday. Rated A2 by Moody's and A-plus by Standard & Poor's and Fitch, it consists of $89.6 million of Series F tax-exempt bonds maturing from 2011 to 2023, and $40.8 million of Series G bonds that mature from 2023 to 2025 and for which bidders may submit bids for either tax-exempt bonds or federally taxable BABs, according to the sale notice.

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