New issuance will continue to dwindle this week, increasing the already hearty demand and keeping municipal yields steady to lower as an estimated $4.39 billion in competitive and negotiated volume is expected to arrive in the primary market, according to The Bond Buyer and Ipreo LLC.
The estimate follows a total revised volume of $5.08 billion in new volume that was priced last week, according to Thomson Reuters, and is just shy of the $5.42 billion 30-day visible supply.
On Friday, an underwriter in New York said the pending blizzard forecasted to hit the Northeast late Friday night and into Saturday was doing little — if anything — to hinder the already-skimpy new-issue calendar. The municipal market, meanwhile, ended last week steady to stronger across the curve on Thursday, following Wednesday’s gains. As of Thursday’s close, yields on the Municipal Market Data 10-year triple-A general obligation scale were one basis point lower at 1.80%, while the 30-year yield held flat at 2.86% for the third straight session, and the two-year closed at 0.34% for the ninth consecutive session.
While investors clamor for paper, they will see only a handful of relatively small deals this week.
The two largest deals will hail from California, including a $335.2 million San Francisco Public Utility Commission, which will headline the estimated $1.93 billion in competitive volume this week — down from last week’s $1.36 billion.
A $290 million San Diego, Calif., Water Authority refunding, meanwhile, will lead the activity in the negotiated market where an estimated $2.41 billion is expected to arrive, significantly less than the $3.72 billion sold last week.
The San Francisco deal will be priced on Tuesday and is structured as serial bonds, which are rated Aa3 by Moody’s Investors Service and AA-minus by Standard & Poor’s.
The San Diego water deal, meanwhile, is slated to be priced on Wednesday by JPMorgan with a structure that includes serial bonds maturing from 2019 to 2034. The bonds are expected to be rated Aa2 by Moody’s and AA-plus by both Standard & Poor’s and Fitch Ratings.
Elsewhere in the negotiated market, North Carolina State University at Raleigh will issue $275.5 million of both tax-exempt and taxable bonds when Wells Fargo Securities prices the two-pronged deal on Wednesday.
The financing, which is rated Aa1 by Moody’s and AA by Standard & Poor’s, includes $133.85 million of tax-exempt securities maturing from 2016 to 2030, and term bonds in 2036, 2038, and 2042, and $141.69 million of taxable debt maturing from 2013 to 2025 with terms in 2033 and 2041.
In Texas, the Lewisville Independent School District is planning to issue $211.5 million of Permanent School Fund-guaranteed general obligation bonds on Tuesday in a two-pronged deal being senior-managed by Raymond James & Associates and maturing from 2013 to 2027. The offering consists of $61.50 million of tax-exempt bonds and $86.90 million of taxable debt.
Back in the competitive market, Virginia is expected to sell $237 million of GO and refunding debt on Wednesday, while the Victor Valley Union High School District in California, is planning to issue $212.79 million of GO serial bonds on Wednesday.
The Maryland Department of Transportation will round out the competitive activity with a $180 million sale of revenue bonds on Wednesday, which will be structured as serial bonds and rated AAA by Moody’s and AA-plus by Standard & Poor’s.