The municipal market is off to a sluggish start this week, as July begins with light supply.
"There are relatively small and clean deals this week," a New York trader said. "I'm not expecting any shocks via the primary."
The month of June showed healthy gains with new issuance totaling about $35 billion, according to a report published by RBC Capital Markets.
"June is typically the largest volume month of the year, accounting for almost 11% of annual issuance, on average, so it's not surprising that June's volume was 29% north of May's $27 billion figure," the RBC report said.
RBC predicts issuance will continue to drop off in the second half of the year.
"There's a small issuance calendar this week with the largest deal on the negotiated side being $250 million," a second New York trader said. "Issuance is a little on the defensive."
Barclays Capital will bring $250 million of Connecticut Health and Educational Facilities Authority revenue bonds on Wednesday. The deal is rated Aaa by Moody's Investors Service and AAA by Standard & Poor's.
Citigroup Global Markets will price $250 million of Indiana Finance Authority private activity bonds. The deal is rated BBB-minus by S&P and BBB by Fitch Ratings.
"The Indiana finance deal will be the most interesting regarding yield," the second trader based in New York said.
Morgan Stanley will price $238 million of Louisiana gasoline and fuel tax revenue refunding bonds on Thursday. The deal is rated Aa1 by Moody's and AA by Standard & Poor's.
Raymond James & Associates will bring a three-part deal totaling $157.1 million of Massachusetts Port Authority revenue refunding bonds to the market on Wednesday. The deal is rated Aa3 by Moody's, AA-minus by S&P and AA by Fitch.
In the competitive market, the Massachusetts School Building Authority will auction $300 million of bond anticipation notes on Thursday, the largest deal of the week. The deal is rated MIG1 by Moody's, SP-1-plus by S&P and F1-plus by Fitch.
"I don't think the Mass. $300 million deal will be a problem," the second New York trader said. "Treasuries are stronger so there should be healthy bids for that."
The state of Wisconsin will sell $254.8 million of general obligation bonds on Wednesday.
The state of Colorado will auction $165 million of tax revenue anticipation notes on Wednesday. The deal is rated MIG1 by Moody's and SP1-plus by S&P.
