Illinois and the Los Angeles Unified School District will share the limelight this week with each bringing a billion-dollar deal to market.

New volume is an estimated $6.81 billion, according to Ipreo LLC and The Bond Buyer.

The markets were closed yesterday due to the observance of Presidents Day.

Illinois will continue to dominate the new-issue activity in the Midwest, as it has since the start of 2010, with this week’s $1.43 billion GO refunding that is planned for pricing by co-senior book-runners Morgan Stanley and Citi on Thursday, following a retail order period tomorrow.

The deal is the state’s third billion-dollar sale since the beginning of the year, keeping it the Midwest region’s top issuer, with $4.46 billion among four issues and a market share of 36.8%, according to Thomson Reuters.

Structured to mature serially from 2011 to 2025, the Illinois tax-exempt GOs are rated A2 by Moody’s Investors Service, A-plus by Standard & Poor’s, and A by Fitch Ratings. They will refund GO debt issued between 1999 and 2002.

Moody’s and Standard & Poor’s maintain negative outlooks on the debt due largely to budgetary deficits, revenue shortfalls, spending pressures, and declining operating liquidity. Fitch has the credit on negative watch.

This week’s Illinois deal was preceded by two other mammoth sales — a $1 billion taxable Build America Bond GO financing the week of Jan. 25, and a $3.46 billion sale of traditional taxable GO bonds the week of Jan. 4. In the most recent BAB deal, the final 2035 maturity was priced with a 6.63% coupon at par that came at 205 basis points higher than the comparable Treasury yield at the time of the pricing.

Meanwhile, in California, the nation’s second-largest school district will add to the new-issue activity when it sells a two-pronged GO financing totaling $1.9 billion.

The Los Angeles USD plans to issue $1.41 billion of the deal as BABs on Thursday through a negotiated pricing led by co-senior managers Morgan Stanley, Citi, Goldman, Sachs & Co., and Barclays Capital. That portion of the deal is being sold to finance the district’s ongoing building program in the face of declining state operating support and a projected $470 million deficit for fiscal 2011.

At the same time, the district will sell up to an additional $504 million of tax-exempt new-money and refunding GO bonds in a Citi-led deal that is also slated for pricing Thursday. The transaction is expected to be rated Aa3 by Moody’s and AA-minus by Standard & Poor’s. The new-money portion is sized at $448 million and is expected to mature serially from 2017 to 2034. The refunding portion is around $56 million and is weighted mostly in a 2015 maturity, a Citi underwriter said Friday.

In the Southeast, the health care and utilities sectors will see nearly $1.5 billion coming to market. The Kentucky Economic Development Finance Authority is set to sell $545 million of revenue bonds on behalf of the Owensboro Medical Health System. The Memphis Electric Authority is aiming for $461.5 million on behalf of Memphis Light, Gas and Water Division. In addition, the North Carolina Medical Care Commission is gearing up to sell $330 million of revenue refunding bonds on behalf of North Carolina Baptist Hospital.

The Kentucky hospital deal is expected to be priced by Bank of America Merrill Lynch on Thursday, following a retail order period tomorrow. The deal’s $474.8 million series will finance a 447-bed replacement hospital, while the $70.1 million series will refinance outstanding debt. Both series are to be rated Baa2 by Moody’s and BBB-plus by Fitch.

The Memphis utility deal, meanwhile, will consist of serial bonds maturing from 2014 to 2018 and will be priced by Morgan Keegan & Co. tomorrow. The bonds are expected to be rated Aa2 by Moody’s, AA-plus by Standard & Poor’s and AA-plus by Fitch.

The North Carolina hospital deal will be priced by Morgan Stanley tomorrow, following a retail order period set for today. Proceeds from the offering — which is rated Aa3 by Moody’s and AA-minus by Standard & Poor’s — will refund the commission’s outstanding daily and weekly variable-rate debt from 1992, 1996, 2000, and 2009, according to the preliminary official statement.

In the Northeast, the Allegheny County Hospital Development Authority is planning two separate deals totaling $700 million on behalf of the University of Pittsburgh Medical Center tomorrow.

Approximately $350 million will be sold in a deal being senior managed by Bank of America Merrill with a serial structure that matures from 2011 to 2023. The firm will conduct a retail order period today before the pricing.

PNC Capital Markets will price an additional $350 million on behalf of the medical center in its own deal, also scheduled for pricing tomorrow after a retail order period today. The structure will consist of serial bonds maturing from 2011 to 2031.

Both deals are tax-exempt fixed-rate bonds and are expected to be rated Aa3 by Moody’s, A-plus by Standard & Poor’s, and AA-minus by Fitch.

Volume in the competitive market will be limited to very few large deals, such as a two-pronged sale of severance tax bonds today from New Mexico that totals $249 million and consists of a serial structure maturing from 2011 to 2020. The deal is to include $149 million of debt in Series 2010 A, and $100 million of subordinate debt in Series 2010B.

The bonds are backed by levies on oil and natural gas extracted in New Mexico. They will finance capital outlays for public schools and various other state education projects, according to the preliminary offering statement.

Looking back to last week’s market, a revised $5.78 billion arrived in the new-issue market, according to Thomson Reuters. That activity was led by a $530 million revenue sale from the Connecticut Health and Educational Facilities Authority on behalf of Yale University that was priced Tuesday by Barclays and JPMorgan.

The $300 million Series 2010A revenue bonds had a final 2049 maturity, $150 million of which carried bifurcated coupons set at 2% and 4% that were both subject to a mandatory three-year put and priced to yield 1.05%.

The remaining $150 million of the maturity was bifurcated into coupons set at 2.50% and 5% and were both subject to a mandatory five-year put and priced to yield 1.77%.

The bonds have natural triple-A ratings from Moody’s and Standard & Poor’s.

Last week, the scale in 30 years ended at a 4.17% yield at the close of trading on Friday, according to MMD.

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