While April ended with record-high volume of $43.8 billion, May is starting out on a sluggish note with new issuance expected to decline significantly from last week.

Essential service, health care, and transportation issues are among the largest deals expected to arrive in the primary market among an estimated $3.83 billion in new issuance, compared with a revised $9.35 billion last week, according to Thomson Reuters.

The New York State Environmental Facilities Corp. will headline the activity in the negotiated market when it sells $481.5 million of second resolution bonds to finance various New York City Municipal Water Finance Authority projects.

The deal - the largest of the week - will be priced by Depfa First Albany SecuritiesLLC on Wednesday after a retail-order period tomorrow.

The structure consists of $262.6 million of senior-lien revenue bonds in Series 2008A, which carries natural triple-A ratings from all three major rating agencies, and $218.9 million of subordinate state revolving fund bonds in Series 2008B, which are rated Aa1 by Moody's Investors Service, AA by Standard & Poor's, and AA-plus by Fitch Ratings. The deal has a 30-year amortization structure, though the exact details regarding specific serial and term bonds were being decided at press time on Friday.

Southeast investors, meanwhile, will see a $426.4 million sale from the North Carolina Municipal Power Agency No. 1on Wednesday when Morgan Stanley prices the three-pronged deal. Most of the offering which will refund outstanding debt issued for the Catawba nuclear power station, and also includes the conversion of approximately $245 million of auction-rate debt to a fixed rate.

The bonds, which are payable from revenues of the power agency, are structured in three series - one of which is federally taxable.

Series A consists of $344.8 million of electric revenue refunding bonds, which are tax-exempt and structured to mature from 2013 to 2020. Series B consists of $9.3 million of revenue refunding bonds, which are federally taxable and expected to mature in 2013, while Series C totals $72.2 million and consists of revenue bonds that are tax-exempt and mature from 2009 to 2020. Series C will finance various capital improvements at the Catawba plant.

One of the largest deals in the market last week hailed from the North Carolina Eastern Municipal Power Agency, which sold $429.1 million of revenue debt with a final maturity in 2024 - one of few maturities that were uninsured with triple-B underlying ratings - which carried a 5% coupon that was priced to yield 5.15%. The yield was 91 basis points cheaper than the generic triple-A GO scale due in 2024, but 45 basis points richer than the BBB health care sector in 2024 the day of the pricing, according to Municipal Market Data.

In another large offering, Detroit will sell $382.4 million of water supply system senior-lien revenue bonds and second-lien revenue refunding bonds in a restructuring that is expected to be priced by Siebert, Branford Shank& Co. tomorrow.

The deal will restructure the city's outstanding variable-rate debt and convert it from a weekly to a fixed-rate mode.

The restructuring will consist of $190.3 million of Series 2001-C second-lien revenue debt which is expected to mature from 2009 to 2029, and $192 million of 2005-C senior-lien revenue bonds, which are scheduled to mature from 2010 to 2035. The new fixed-rate bonds will be payable with the net revenues of the city's water system.

A $337.4 million sale from the Washington Health Care Facilities Authority is expected tomorrow when Merrill, Lynch & Co. prices the multi-faceted deal on behalf of Multicare Health System, a nonprofit organization based in Tacoma, Wash.

The deal will be divided into six series of bonds, part of which is a conversion of auction-rate debt to fixed rated. Series 2004 A, B, and C are structured to mature as serial bonds from 2023 to 2028, with a term bond in 2034. Series 2007 A and B, which will convert the authority's ARS debt, are structured to mature serially from 2012 to 2025 with term bonds in 2031, 2038, and 2041. Series 2008C, meanwhile, is the only new-money portion, and will consist of one term bond due in 2043. Only Series 2008C will be insured by Assured Guaranty Corp., while the remaining series are insured by Financial Security Assurance.

A pair of other deals will hail from California, the largest of which is a $208.9 million electric revenue bond issue from Riverside.

The Series 2008D new-money issue will be insured by FSA and will be priced by Merrill Lynch on Thursday, after a retail order period on Wednesday. The bonds, which are secured by a lien on the net operating revenues, funds, assets, and other securities of the city's electric utility system, will be structured as serial bonds maturing from 2017 to 2028 with term bonds in 2033 and 2038.

Proceeds will finance various projects included in the city's $391 million, four-year electric system capital improvement program.

Meanwhile, the Santa Clara County Finance Authority will bring $115.8 million of lease revenue refunding bonds to market in a deal that will convert some of its outstanding auction-rate debt to fixed-rate.

Scheduled for pricing on Thursday by Banc of America SecuritiesLLC, the Series 2008L bonds are structured to mature serially from 2009 to 2023, with term bonds in 2028 and 2036, and have underlying ratings of Aa3 from Moody's and AA from Standard & Poor's. The proceeds will refund $21.3 million of Series 2003D, $39.9 million of Series 2005H, and $53.9 million of Series 2006J bonds, and the bonds are payable from rental payments made by Santa Clara County to the authority.


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