Palms Springs, Calif. Unified School District is scheduled to auction $109.4 million of general obligation bonds in the competitive market on Thursday.
"Palm springs is a decent name, and a lot of underwriters are stepping up for that," a trader in Florida said. "I think [there will be competition for the bid], it will receive more aggressive bids because it's a school district deal."
A New York trader said that the deal is attractive because "education is always a hot credit, and with the high-net worth retail buyers in California, I have no doubt in my mind this will do well."
The transaction may attract an unusual level of interest for a deal of its size.
"We're putting in a bid with a syndicate," a West Coast trader said. "It's a good name and it's a good size so I think it will be well received."
The deal is rated AA-minus by S&P.
"From an issuer's perspective, what we've seen in the aftermath of Puerto Rico is that higher quality assets are in high demand," an Issuer from Cook County, Illinois said.
Low issuance this year has led to more competition for supply.
"It's the same story and perspective," a trader in Dallas said. "Retail has been spotty for months. Issuance has been thin and business has been slow."
Treasuries were mixed Thursday, with the 30-year and the 10-year benchmark yields falling two basis points each to 3.32% and 2.52%, respectively. The yield on the two-year note rose one basis point to 0.50%.
