Issuers in Texas and California will dominate the primary calendar this week - bringing a fresh supply of Build America Bonds to the new-issue market - as the end of July marks the arrival of an estimated $5.91 billion of total competitive and negotiated volume, according to Ipreo LLC and The Bond Buyer.

This week's volume is nearly double the supply last week, when a revised $3.10 billion of new deals sold, according to Thomson Reuters. The increase in planned issuance comes as investors continued the year's trend and put nearly $1 billion of cash into municipal bond mutual funds last week.

The largest deal priced last week was $800 million of future tax-secured bonds from the New York City Transitional Finance Authority on Thursday by JPMorgan.

The deal contained a 2038 final term bond that carried a 5% coupon and yielded 5.04% - 38 basis points higher in yield than the comparable generic, triple-A general obligation bond on the Municipal Market Data scale at the time of the pricing.

This week, two separate bond issues from Houston - one of which includes taxable BABs - and a sizable Texas water deal will turn investors' attention to the Lone Star State.

The larger Houston sale is a two-pronged offering of public improvement refunding bonds totaling $490 million, a portion of which consists of BABs.

Loop Capital Markets is expected to price the deal on Wednesday with a structure that includes $415 million of Series 2009A new-money and refunding bonds maturing serially from 2010 to 2027, and $75 million of Series 2009B direct-pay BABs maturing in 2029.

In addition, on the same day, Houston is also planning to sell $420 million of airport system senior-lien revenue and refunding bonds in a separate tax-exempt negotiated deal being priced by book-runner JPMorgan.

That deal, which is structured with a final 2039 term bond, is expected to carry ratings of Aa3 from Moody's Investors Service and AA-minus from Standard & Poor's.

Meanwhile, two other Texas deals are also earmarked for pricing this week.

The Texas Water Development Board is planning to offer $257 million of clean water state revolving fund subordinate-lien revenue bonds to retail investors today, followed by an official pricing for institutional investors by lead manager Merrill Lynch & Co. tomorrow.

The deal is structured with $224.6 million of revenue bonds and $32.8 million of revenue refunding bonds. A source at Merrill said the structure was not available at press time on Friday.

The bonds are expected to have ratings of Aa3 from Moody's and natural triple-A ratings from Standard & Poor's and Fitch Ratings.

In addition, the Cypress-Fairbanks Independent School District will sell school building and refunding bonds in a $225 million Merrill-led deal scheduled for pricing on Wednesday. The firm did not have a structure available on Friday.

Aside from the Texas offerings, the single largest deal of the week is expected to be a $568.7 million Indianapolis Local Public Improvement Bond Bank refinancing for the city's waterworks project. Scheduled for pricing by Morgan Stanley, the revenue deal is expected on Wednesday.

The bonds are tentatively structured to mature serially between 2011 and 2024 with term bonds in 2029 and 2038, according to bond bank deputy director Deron Kintner.

The bonds were downgraded two notches to A3 by Moody's on July 10. Standard & Poor's rates them AA-minus. Each rating has a negative outlook.

The bonds also were downgraded to A-minus from A-plus and given a negative outlook by Fitch on July 14 in advance of the sale. The financing will restructure existing auction-rate and insured variable-rate bonds.

Moving out West, $331.2 million of taxable revenue bonds are being planned by the Southern California Metropolitan Water District.

JPMorgan is expecting to price the offering on Thursday with ratings of Aa2 from Moody's, AAA from Standard & Poor's, and AA-plus from Fitch.

The deal consists of tax-exempt serial bonds maturing from 2012 to 2025 and a taxable series consisting of direct-pay BABs slated to mature in 2039.

Elsewhere in the state, the Los Angeles County Metropolitan Transportation Authority is gearing up to sell $335.3 million of Proposition A first-tier senior sales tax revenue refunding bonds on Wednesday, following a retail order period tomorrow by senior manager Merrill Lynch. The firm could not provide the structure at press time on Friday as it was still being finalized.

Two of the other sizable deals on tap this week include a $250 million sale of sewer revenue bonds expected to be sold by King County, Wash., and priced by Barclays Capital today, and a $250 million revenue bond issue from the Massachusetts Water Pollution Abatement Trust expected to be priced on Wednesday by JPMorgan with serials from 2010 to 2029.

The King County bonds are rated Aa3 by Moody's and AA-plus by Standard & Poor's, while the Massachusetts bonds are expected to be rated Aa by Moody's, and AAA by Fitch and Standard & Poor's.

In the Northeast, $240 million of GO refunding bonds are set to sell this week by Philadelphia. The deal is expected to be priced by Merrill and will be insured by Assured Guaranty Corp. and carry underlying ratings of Baa1 from Moody's, BBB from Standard & Poor's, and BBB-plus from Fitch.

In the competitive market, meanwhile, there is a shortage of sizable deals. One exception is a $135 million water and sewer improvement revenue bond sale from Cobb County, Ga., which is scheduled to be sold tomorrow with a structure of serial bonds maturing from 2010 to 2029.

Among the other activity this week, Citi will begin a retail order period on Friday for a $235 million Maryland GO offering that it will price next week on Aug. 3. The deal has natural triple-A ratings from all three agencies and is structured to mature serially from 2012 to 2023.

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