The stage is set for a large and eventful week as issuers in California and Florida prepare to thunder into the market with a pair of $2 billion deals that will share the new-issue spotlight after last week’s well-received flurry of volume amid late week gains, bankruptcy news out of Stockton, Calif., positive news from Puerto Rico, and weaker than expected employment report.

According to The Bond Buyer and Ipreo LLC, new volume is estimated at $9.71 billion this week, up from a revised $5.25 billion that was actually priced last week, according to Thomson Reuters. Many of those deals were well received, according to traders, and as a result bonds traded up in the secondary market approaching week’s end as municipals, following the strength of Treasuries, plummeted by as much as six basis points in 10 years to 1.80%, while the 30-year fell four basis points to 3.03%, according to Municipal Market Data.

This week, the $2 billion deals – one from California and the other from the Florida Hurricane Catastrophe Fund Finance Corporation -- will test the market’s endurance.

Jay Alpert, executive vice president and manager of trading, sales, and underwriting at M.R. Beal & Co. believes there will be cash in the market to absorb the deals.

“It will be a function of what structures and yields will be used to maximize the deals and create enough sponsorship among the buyers,” he said.

“Additionally there will always be an overhang of bonds in the market after such large issuances,” he said. “I am optimistic the underwriters will appeal to the needs of the buyers. The street would have a monstrous time underwriting such big transactions and disregarding the buying community.”                                        

The California sale will consist of $1.25 billion of new-money various purpose general obligation bonds and $750 million of refunding GOs and is slated to arrive on Thursday following a retail order period on Wednesday. The deal, rated A1 by Moody’s Investors Service, A by Standard & Poor’s, and A-minus by Fitch Ratings, is being co-senior-managed by Bank of America Merrill Lynch, Morgan Stanley and JPMorgan.

The Florida Cat Fund is readying its $2 billion sale of taxable revenue bonds for pricing by Barclays Capital on Wednesday. Rated A3 by Moody’s, AA-minus by Standard & Poor’s, and AA by Fitch, the deal is structured to include bonds maturing in 2016, 2018, and 2020.

Back in California, a two-pronged sale from the California Health Facilities Financing Authority on behalf of Sutter Health is being planned for pricing by Morgan Stanley on Thursday. The deal will consist of $450 million of tax-exempt securities, and $300 million of taxable debt offered as serials and term bonds but the structure was still being discussed at press time. The bonds are rated Aa3 by Moody’s, and AA-minus by both Standard & Poor’s and Fitch.

The Metropolitan Government of Nashville and Davidson County, Tenn., will issue $227.9 million of water and sewer revenue bonds in a Morgan Stanley-led financing planned for pricing on Wednesday. The bonds are rated Aa3 by Moody’s and AA-minus by Standard & Poor’s.

A trio of large deals is on tap in the Northeast, led by $219.7 million of mortgage revenue bonds by the New York State Mortgage Agency. JPMorgan is expected to price the deal on Thursday, following a retail order period on Wednesday. Bonds are rated Aaa by Moody’s and are not subject to the alternative minimum tax.

The Triborough Bridge and Tunnel Authority is expected to sell $200 million of general revenue bonds expected to be rated Aa3 by Moody’s, and AA-minus by the other two major rating agencies. Ramirez & Co. is planning to price the deal for institutions on Thursday, following a retail order period on Wednesday with serial and term bonds, but the structure was not available at press time.

A a three-pronged financing totaling $290 million from the New Jersey Health Care Facilities Authority of Department of Human Services lease revenue bonds will be competitively bid on Tuesday.

Among the other sizable negotiated deals pricing this week, the Lower Colorado River Authority, Texas, will sell $201 million of revenue refunding bonds. Citi will price the offering on Tuesday with a structure that includes serial bonds maturing from 2024 to 2033 with term bonds in 2014 and 2036. The bonds are expected to be rated A2 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch.

In the competitive market, Michigan is preparing to issue $200 million of double-A-rated GO school loan bonds on Wednesday maturing serially from 2024 to 2033, while a $247 million sale of GOs is on tap from the Washington Suburban Sanitary District on Tuesday. The bonds – triple-A across the board – consist of $150 million of consolidated public improvement bonds maturing from 2014 to 2023 and $97 million of consolidated public improvement refunding bonds maturing from 2014 to 2020.

Last week, the $800 million Illinois GO sale and $950 million Pennsylvania GO sale were both well received when they were competitively bid on Tuesday and Wednesday.

The week was marked by the court ruling that Stockton, Calif. is eligible to file for Chapter 9 bankruptcy. Even though odd-lot Stockton trades traded weaker on Tuesday, traders said the isolated situation would not impact the general market.

Meanwhile, news of pension reform from Puerto Rico officials offered some positive balance amid the commonwealth’s recent turmoil.

The Pennsylvania deal exemplified the strong demand. Its final 2033 maturity was priced with a 3.34% yield -- noticeably tighter than earlier in the week, traders reported -- 60 basis points higher in yield than the comparable generic triple-A, and seven basis points lower than the insured GO scale, according to MMD. The commonwealth’s GO are rated Aa2 by Moody’s, AA by Standard & Poor’s, and AA-minus by Fitch.

Meanwhile, the single-A-rated Illinois deal entered the market amid a cloud of financial turmoil due to unpaid bills, and unfunded pension liabilities, but the new issue was well received, traders said. The 2038 uninsured tax-exempt maturity yielded 4.44% -- 145 basis points higher than the benchmark GO scale at the time, according to MMD.

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