The bulk of this week's new issue debt is expected to enter the municipal market on Tuesday, as reinvestment season takes flight.
July 1 means maturing debt and coupon payments.
"Folks have to remember that you can't always count on reinvestment demand coming back into the market," Fred Bacani, head of fixed income and trading at Veritable LP said. "If you look at last year, despite June and July being strong in terms of maturity and coupon payments, the rising rates had a lot of investors sitting on the sidelines. Right now, we're seeing reinvestment demand into munis, but it shouldn't be viewed as a given."
New issuance was higher this June at $34 billion, compared to last year's $26 billion, the first time this year that a month surpassed the issuance for the same period last year.
"Right now is an ideal time for issuers to come into the market, simply because there is some stability if not strength on the rate front," John Dillion, managing director at Morgan Stanley Wealth Management said. "There is a large amount of redemptions in the market as we head into the summer."
RBC Capital Markets will price $322 million of Lancaster Port Authority gas supply revenue refunding bonds on Tuesday, the largest deal in the negotiated market. The deal is rated Aa3by Moody's Investors Service.
J.P. Morgan Securities will bring $333 million of Dallas Independent School District unlimited tax refunding bonds to market. The deal is rated Aa1 by Moody's and AA-minus by S&P.
Wells Fargo Securities will price $200 million of Los Angeles Department of Water and Power revenue bonds on Tuesday. The deal is rated Aa3 by Moody's, and AA-minus by both S&P and Fitch.
Raymond James will bring $105 million of Houston Higher Education Finance Corporate revenue and refunding bonds on Tuesday. The deal is rated BBB by S&P.
The Alabama Public School and College Authority will auction $555 million of capital improvement refunding bonds on Tuesday, the largest deal of the week. The deal is rated Aa1 by Moody's Investors Service, AA by Standard & Poor's and AA-plus by Fitch Ratings.
Massachusetts will sell $450 million of double-A rated general obligation bonds on Tuesday. The deal is rated Aa1 by Moody's, and AA-plus by both S&P and Fitch.
