The market continued to move at a lethargic pace Monday afternoon as yields remained unchanged.
A heavy slate of issuance is set to invigorate the market, including a wave of refundings, according to Citi Research analysts.
The $11 billion issuance expected this week will have a considerable impact on the market, Citi said in a report Monday. Refunding deals this week could total as much as $3 billion, compared with $8 billion of bonds refunded throughout January and February.
"Heavier issuance in this category could be a sign of things to come," authors George Friedlander and Mikhail Foux said in the report. "And in the meantime, the demand side of the market has shown certain signs of weakness."
Some of the larger refunding deals this week include Houston, Texas' Combined Utility Systems' two-part deal totaling about $1.29 billion. The deal calls for $606 million of taxable first lien revenue refunding bonds, while the remaining $686 million are tax-exempt.
The tax-exempt bonds are scheduled to be priced on Wednesday with Siebert Branford Shank & Co. as lead manager, and are rated AA by both S&P and Fitch. The taxable bonds do not have an official release date and the lead underwriter is J.P. Morgan Securities.
The city of Chicago is also issuing taxable and tax-exempt general obligation refunding bonds totaling $655.14 million with Wells Fargo Securities as the underwriter. The deal is rated Baa1 by Moody's, A-plus by S&P and A-minus by Fitch, and do not have a specific issuance date set yet.
The Southern California Public Power Authority apex power project is issuing $319.3 of revenue bonds on Thursday, which will be broken down into tax-exempt and federally taxable groupings. Goldman, Sachs & Co. is the underwriter and the bonds are rated AA-minus by S&P and A-minus by Fitch.
Municipal bond yields measured by Municipal Market Data's AAA scale jumped as much as two basis points on bonds maturing in 2016 to 2020, while those maturing outside that range were stable.
Treasury yields have firmed since Friday, with the 30-year and 10-year bonds sliding one basis point each to 3.72%, and 2.79%, respectively. Two-year notes gained one basis point to 0.39%.
