Municipal market participants will come back to work after a long holiday weekend to almost $7 billion of new issuance, highlighted by another billion dollar deal from California.

Ipreo estimates volume will increase to $6.82 billion, from a revised total of $4.57 billion in the past holiday shortened week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $5.55 billion of negotiated deals and $1.27 billion of competitive sales.

The market closes in observance of Good Friday.

The State of California, the No. 1 municipal issuer in terms of par amount, will add to its yearly total with $1.25 billion of taxable general obligation high speed passenger train bonds on Thursday. JPMorgan is expected to price the bonds, which are rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.

“California ... will be well received, there is no surprise there, and this deal might be more-so, because [the bonds] are taxable,” said Dawn Mangerson, managing director and senior portfolio manager at McDonnell Investment Management.

Mangerson said California isn’t in any danger of over-saturating the market. “The recent Cal deals have been priced very rich and have been well oversubscribed," she said. "I don’t see that going away anytime soon.”

The calendar looks top heavy. After the billion dollar plus transaction, it doesn't have any deals larger than $400 million. There are 20 deals ranging in size from $100 million up to $350 million.

RBC Capital Market is scheduled to price the city of Houston's $350 million of combined utility system first lien revenue refunding bonds on Thursday. The deal is rated Aa2 by Moody’s and AA by Fitch.

JP Morgan is also slated to price Geisinger Authority, Montour Co., Pa.’s $345.25 million of health system revenue bonds for the Geisinger Health System on Wednesday. The deal is rated Aa2 by Moody’s and AA by S&P.

Mangerson said the hospital deals "are offering more yield and should go well.”

Siebert Cisneros Shank & Co. LLC is expected to price the Dormitory Authority of the State of New York’s $300 million of NYS University dorm facilities revenue bonds on Wednesday following a one day retail order period. The deal is rated Aa3 by Moody’s and A-plus by Fitch.

The largest competitive deal will take place on Tuesday, when Miami-Dade County School District is set to sell $250 million of GO school bonds. The deal is rated Aa3 by Moody’s.

“We continue to see low yields and low volatility, with strong demand up and down the curve,” said Jim Grabovac, senior portfolio manager at McDonnell.

Secondary market

Top shelf municipal bonds ended stronger on Thursday. The yield on the 10-year benchmark muni general obligation fell four basis points to 2.08% from 2.12% on Wednesday, while the 30-year GO yield dropped three basis points to 2.91% from 2.94%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were stronger on Thursday. The yield on the two-year Treasury dropped to 1.21% from 1.23% on Wednesday, while the 10-year Treasury yield fell to 2.24% from 2.29%, and the yield on the 30-year Treasury bond decreased to 2.89% from 2.93%.

The 10-year muni to Treasury ratio was calculated at 93.3% on Thursday compared to 92.5% on Wednesday, while the 30-year muni to Treasury ratio stood at 101.0%, versus 100.4%, according to MMD.

Week's most actively traded issues

Some of the most actively traded issues by type in the week ended April 14 were from Alaska, California and Maryland, according to Markit.

In the GO bond sector, the Anchorage, Alaska, 2s of 2017 were traded 34 times.

In the revenue bond sector, the California State Public Works Board 5s of 2027 were traded 41 times.

And in the taxable bond sector, the Maryland State Community Development Administration 4.103s of 2032 were traded 28 times.

Week's most actively quoted issues
Puerto Rico, Michigan and Illinois names were among the most actively quoted bonds in the week ended April 14, according to Markit.

On the bid side, the Puerto Rico Commonwealth GO 5s of 2041 were quoted by 38 unique dealers. On the ask side, the L’Anse Creuse Public Schools, Mich., taxable 2.478s of 2021 were quoted by 102 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 29 unique dealers.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.