Municipal volume is projected to jump back over $8 billion in the coming week, led by billion-dollar deals from Chicago, Indiana and California.
Volume is projected at $8.71 billion for the week of July 13 by Ipreo and The Bond Buyer, up from a revised total of $5.43 billion the week of July 6, according to Thomson Reuters.
There are $7.09 billion of negotiated deals slated for the week of July 13 versus a revised total of $4.18 billion negotiated bonds sold in the past week. Bonds scheduled for competitive sale next week total $1.62 billion, compared with $1.23 billion.
The $1.07 billion of general obligation bonds from the city of Chicago may be the most closely watched deal of the week, as the city has said the transaction will eliminate liquidity risks on its general fund stemming from the May 12 loss of its investment grade rating from Moody's Investors Service.
Expected to be priced by Morgan Stanley on Thursday, the sale includes $344 million of Series 2015A tax-exempts and $730 million of Series 2015B taxables, with much of the sale moving short-term debt into a longer, fixed-rate term with capitalized interest for two and a half years. The deal offers of a mix of serial and term bonds with a final 2042 maturity. William Blair and Siebert Brandford Shank are co-senior managers.
"The city has embarked upon a series of reforms designed to build a stronger balance sheet, reduce taxpayer risks, and secure the city's long-term financial stability," said Carole Brown, Chicago's new chief financial officer.
This week, Standard & Poor's downgraded the city to BBB-plus from A-minus, removed the rating from negative CreditWatch and assigned a negative outlook. Fitch Ratings affirmed the city's BBB-plus rating, removed the credit from its rating watch negative and assigned a negative outlook. And Kroll Bond Rating Agency affirmed the city's A-minus and stable outlook.
Also on tap, Bank of America Merrill Lynch is slated to price the Indiana Toll Road ITR Concession Co.'s $1 billion of senior secured notes on Wednesday only months after the original private owner of the publicly owned toll road went bankrupt.
The new owner Australian fund manager fund IFM Investors, is set to complete the financing of its takeover bid with next week's sale. The 157-mile Indiana Toll Road is a key link between Chicago and the East Coast. Fitch and S&P both rate the bonds BBB, which will be issued by IFM's subsidiary ITR Concession Co.
JPMorgan is expected to price on Wednesday the California State University Trustees' $1.1 billion of systemwide revenue bonds consisting of $1.07 million Series 2015A tax-exempts, due 2015-2014, and $30 million of Series 2015B taxable, due 2016-2035. The bonds are rated Aa2 by Moody's and AA-minus by S&P.
In the competitive sector, top-rated Maryland is set to competitively sell $500 million of GOs on Thursday in two separate sales: one for $450 million of tax-exempts and the other for $50 million of taxables.
The proceeds of the tax-exempts will be used to finance capital projects such as educational facilities and hospitals. The taxable bond proceeds will mainly be used to support housing, community development and water-quality financing programs.
Moody's, S&P and Fitch affirmed Maryland's triple-A rating ahead of the sale. Maryland typically has competitive GO bond sales twice a year. The Treasurer's office said it expects to have another sale in February or March.
