The primary market should be fairly brisk this week as the new-issue calendar includes two California deals each larger than $1 billion, a handful of Build America Bond issues, short-term notes, variable-rate bonds, and a generous helping of long-term essential service issues.

California’s $3 billion of negotiated sales tax-backed economic recovery refunding bonds will dominate the market based on its size and availability and accounts for a substantial amount of the estimated $10.786 billion in new, long-term volume targeted for pricing by issuers this week, according to Ipreo LLC and The Bond Buyer.

Last week, a revised $4.429 billion came to market, according to Thomson Reuters.

This week, the California sale consists of two series of refunding bonds and is expected to be offered to retail investors in a two-day retail order period tomorrow and Wednesday before Thursday’s planned official pricing by senior manager Barclays Capital.

The state’s outstanding bonds recently received upgrades from all three major rating agencies in advance of the sale — to A1 by Moody’s Investors Service, A-plus by Standard & Poor’s, and A by Fitch Ratings. The preliminary structure includes $2.6 billion of fixed-rate Series 2009 A bonds and $400 million of floating-rate Series 2009B bonds.

The deal will restructure California’s outstanding deficit bonds and bring the debt service schedule in line with reduced sales-tax projections.

Unlike a typical economic refunding, which is highly sensitive to interest rates, the economic recovery bond deal is driven by the target of achieving 1.3 times coverage of the sales tax that backs the bonds, which is key to upgrades announced for the ERBs, said Tom Dresslar, spokesman for the state treasurer’s office.

The California bonanza continues with a $1.3 billion revenue bond sale from the Bay Area Toll Authority, its first-ever BAB sale, as well as a $569 million revenue financing from the California Health Facilities Finance Authority on behalf of Catholic Healthcare West.

Scheduled for pricing by Citi on Wednesday, the taxable direct-pay BAB sale is structured with a final maturity in 2049, and contains make-whole calls. The deal is expected to be rated Aa3 by Moody’s, AA by Standard & Poor’s, and AA-minus by Fitch. Proceeds will help finance the cost of seismic retrofitting as part of a $6.3 billion San Francisco-Oakland Bay Bridge rebuilding project.

The California health care offering, planned for pricing by Citi on Wednesday, consists of variable-rate health facility revenue bonds in three series, one of which will be issued through the Arizona Health Facilities Authority. The bonds are expected to carry ratings of A2 from Moody’s, A from Standard & Poor’s, and A-plus from Fitch, and are tentatively structured to mature serially from 2010 to 2025.

The Northeast also expects a flurry of activity in the week, with two BAB deals garnering spots in the largest deals list.

The New York City Municipal Water Finance Authority will sell as much as $723 million of water and sewer system second general resolution revenue bonds in a two-pronged negotiated deal being senior-managed and priced by Barclays.

The deal has two components, the larger of which is fiscal 2010 Series AA, which includes $500 million of taxable direct-pay BABs scheduled for pricing tomorrow or Wednesday. Fiscal 2010 Series BB includes between $200 million and $223 million of traditional tax-exempt revenue refunding bonds. Retail investors got first crack at those bonds beginning on Friday, and will be able to place advance orders again today before an official pricing tomorrow.

The bonds are expected to be rated Aa3 by Moody’s, AA-plus by Standard & Poor’s, and AA by Fitch. The structure was still being hammered out at press time.

Elsewhere in the Northeast, Connecticut will issue special tax obligation bonds in a three-pronged financing that is planned for pricing by Siebert, Brandford Shank & Co. on Wednesday, following a retail order period planned for tomorrow.

The deal consists of $250 million of tax-exempt new-money bonds in Series A, which matures from 2010 to 2019; $250 million of taxable direct-pay BABs in Series B, which matures from 2020 to 2029; and $50 million of tax-exempt refunding bonds in Series C, which matures from 2010 to 2014.

Proceeds will finance transportation infrastructure projects, and the bonds are rated A1 by Moody’s, AA-minus by Standard & Poor’s, and AA-minus by Fitch.

A $300 million competitive sale of consolidated bonds from the Port Authority of New York and New Jersey on Wednesday will round out the big deal activity in the Northeast. The bonds are structured to mature from 2030 to 2039 and are rated A3 by Moody’s, AA-minus by Standard & Poor’s, and AA-minus by Fitch.

In the Southeast, meanwhile, sizable deals are expected from issuers in Kentucky and Florida.

The Kentucky State Property and Buildings Commission will come to market with a $393.2 million sale, which includes $98.1 million of Series A tax-exempt bonds, $280.9 million of direct-pay BABs, and $14.2 million of traditional taxable revenue bonds.

Morgan Stanley is expected to price the deal on Wednesday, though at press time the firm said structure and ratings were still being finalized

Florida will also be in the market this week when it sells a total of $300 million of debt — including $225 million of BABs to be priced on Wednesday by JPMorgan.

The rest of the deal consists of approximately $75 million of traditional tax-exempts, which will be offered to retail investors tomorrow ahead of Wednesday’s official pricing.

On Friday, a source at JPMorgan said the amounts were preliminary and subject to change at pricing, and that the firm was not yet prepared to announce the maturity structure. The bonds are rated Aa2 by Moody’s, AA-plus by Standard & Poor’s, and AA by Fitch.

Meanwhile, the Harris County, Tex., Cultural Educational Facilities Finance Corp. is planning to sell $320 million of revenue debt on behalf of St. Luke’s Episcopal Hospital in a JPMorgan-led deal slated for pricing tomorrow.

The bonds are expected to mature serially from 2010 to 2031 and carry a AA-minus from Standard & Poor’s.

From the Midwest, the Missouri Highway and Transportation Authority will sell $300 million of third-lien state road bonds in a two-pronged deal planned for pricing on Wednesday by Merrill Lynch & Co.

The deal, which is rated Aa3 by Moody’s, AA by Standard & Poor’s, and AA-minus by Fitch, is comprised of $250 million of BABs, as well as $50 million of traditional tax-exempt bonds. The structure was not yet available at press time.

In the competitive market, the heftiest deal planned this week will be the District of Columbia’s $500 million sale of tax and revenue anticipation notes tomorrow, which are rated MIG-1 by Moody’s.

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