Call it a bond bonanza.

Led by up to $4 billion of taxable general obligation debt from California that could include billions of Build America Bonds, as well as a $1.75 billion sale from the New Jersey Turnpike Authority with $1.25 billion of BABs, the primary market will make room for a glut of both taxable and tax-exempt supply.

The estimated volume calls for more than $10 billion in competitive and negotiated offerings, according to Ipreo and market sources.

The supply bulge will perk up last week's relatively lackluster, holiday-abbreviated market, when tax-exempt issuers sold a revised $3.66 billion in competitive and negotiated offerings.

"Municipal bond investors will welcome additional supply as tentative signs of an economic bottom in the United States seemed to have alleviated some of the anxiety over municipal bond credit quality in the near term," said Michael Pietronico, chief executive officer at Miller Tabak Asset Management.

"This easing of anxiety combined with the almost universal expectation of higher future tax rates at the federal and state levels has created a solid base of demand from individuals for tax-free municipal bonds that we expect to see remain constant well into 2010," Pietronico said.

The California sale - which is expected to be the largest Build America Bond offering to date that will serve as a benchmark for future transactions - will be priced by a syndicate led by co-senior managers Goldman, Sachs & Co., JPMorgan, Barclays Capital, and Morgan Stanley with bullet maturities in 2034 and 2039.

The state will not single out retail investors for the transaction, but instead conduct an Internet road show and one-on-one calls with the taxable bond buyers who don't usually buy California bonds, such as pension funds and foreign banks. The state is rated A2 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.

Proceeds from the unspecified amount of BABs will finance traditional tax-exempt projects, like children's hospital construction, water infrastructure, and schools, and the state will use the remaining taxable proceeds to finance affordable housing and stem cell research. The BAB program was authorized in the America Recovery and Reinvestment Act in February and allows municipalities to sell taxable bonds to receive a 35% interest subsidy from the federal government.

The new sale follows two maiden voyages of BABs last week. The University of Virginia priced $250 million of bonds rated triple-A by all three major rating agencies at a taxable rate of 6.22% - 32% above Municipal Market Data's tax-exempt triple-A GO curve. The University of Minnesota also sold $35 million of BABs Wednesday, with 20-year, double-A rated bonds yielding 3.81%, which was lower than the MMD double-A tax-exempt curve at 4.63%.

Back to this week's market, the New Jersey Turnpike deal will be priced by Morgan Stanley today with ratings of A3 by Moody's and A by Standard & Poor's and Fitch, however, the exact structure of the deal was not available at press time. The deal will be the authority's first new-money sale since 2005.

The market will also see a $650 million deal from New York's Metropolitan Transportion Authority, and a $600 million offering of airport revenue bonds from Miami-Dade County.

The pricing of the MTA deal will take place on Thursday, following a retail order period on Wednesday by JPMorgan in a deal that consists of $450 million of dedicated tax fund bonds maturing from 2009 to 2038, as well as $200 million of federally taxable dedicated tax fund BABs. The offering will be rated AA by Standard & Poor's and A-plus by Fitch.

Miami-Dade is slated to sell $600 million of international airport aviation revenue bonds that are not subject to the alternative minimum tax on Thursday via a negotiated priced by Barclays following a retail order period on Wednesday.

The deal, which is rated A2 by Moody's, A-minus by Standard & Poor's, A by Fitch, will consist of serial and term bonds, but the exact structure was not available at press time.

Other sizable deals on tap this week include a $357 million Tennessee GO bond sale expected to be priced by Morgan Stanley on Wednesday following a two-day retail order period today and tomorrow. The two-pronged new-money and refunding deal, whose structure was not available at press time, is rated Aa1 by Moody's and AA-plus by Standard & Poor's and Fitch.

In addition, a $350 million sale of GO bond anticipation notes is being planned from Connecticut in a negotiated deal slated for priced on Thursday by JPMorgan and maturing in June, 2011.

In the competitive market, meanwhile, a $222.8 million New Mexico GO sale for capital projects is planned for tomorrow with a structure that includes serial bonds maturing from 2010 to 2019.

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