After a relatively healthy week of issuance totaling roughly $6 billion, the primary market will cool off, with no competitive deals scheduled to close Friday, according to data provided by TM3, and weekly issuance forecast to slip to $4.2 billion next week, according to Ipreo and The Bond Buyer.
Municipal funds reported their highest inflows in 11 weeks for the week ending July 23, suggesting demand may outpace supply.
Funds that report weekly said inflows surged fourfold to $686.2 million, from $157.8 million the week before, according to Lipper FMI
Municipal funds haven't reported inflows this high since the week ending May 7, when they totaled $943.2 million.
The inflows come on the heels of a rally in the municipal market. Yields fell for eight straight days from July 15 to Wednesday, according the Municipal Market Data's triple-A scale. During that time the 10-year dropped by 15 basis points to 2.19%, the 30-year by 10 basis points to 3.40%, and the two-year declined by one basis point to 0.31%, according to Municipal Market Advisors' data.
Yields edged higher on Thursday on the long end with the 30-year rising by one basis point to 3.41%, according to MMA.
High-yield muni bond funds reported inflows of $307.7 million, compared with outflows of $59.5 million the previous week.
In the negotiated market, two small deals are scheduled for Friday. A $47.8 general obligation deal issued by West Contra Costa, California will price tomorrow, led by Piper Jaffray. The deal is unrated. Another $52.315 negotiated deal is also scheduled to close tomorrow. Led by Southwest Securities, Copell, Texas will issue school building bonds into the market on Friday as well. This deal is rated AA+ by Standard & Poor's.
The week of July 28th promises to be light in the primary as well, with only one deal over $100 million scheduled to close.
The city of Suffolk, Virginia, plans to sell $124.745 million of GOs in the competitive market on Wednesday of next week. The deal is serialized, with maturities ranging from 2015 to 2042. Standard and Poors has the deal rated AAA, while Fitch rated it AA+. Moody's rated the deal Aa1.
Use of proceeds will go toward various capital improvement projects, as well as retire some of the issuer's outstanding debt. The issuance will raise the city's debt load to $361.4 million.
The largest deal in the negotiated market schedule to price next week is a $744.29 million issuance from the California State University Trustees. The revenue bonds will be lead by Barclays Capital and does not have ratings or a definitive date to close yet, according to data provided by TM3.
The Illinois Sports Facilities Authority also plans to tap the negotiated market with a $285 million sports facility deal lead by Barclays Capital. The deal is rated A by Standard & Poor's. San Antonio will also issue bonds into the negotiated market. The Texas city plans to issue $ 236.95 million general improvement and refunding bonds lead by Piper Jaffray. This deal is rated AAA by Fitch.
