Municipal market volume is set to jump by two-thirds in the coming week, with a $2 billion deal leading the charge.

Ipreo estimates volume will inflate to $7.45 billion, from the revised total of $4.46 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $5.59 billion of negotiated deals and $1.86 billion in competitive sales.

“The muni market is in decent shape, but the theme of ‘not enough supply’ keeps on going and we do not see a major change in that over the next one to two quarters,” said Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management. “If Treasuries stay within this range, the muni market will continue to outperform.”

Heckman said outflows of investor money associated with tax season may ease, and he doesn't see enough supply to fill gaps that will be left by calls and maturities in May and June.

The state of California is set to bring its second two-billion dollar plus deal to market this year, but this time around the Golden State is turning to the taxable market.

JPMorgan is slated to price the $2.15 billion of various purpose taxable GO bonds on Tuesday. The transaction will be mostly refunding bonds, so the state can refinance old debt and provide funding for 2,600 projects, including high-speed rail, stem cell research, and affordable housing. According to the underwriter, it will be the biggest taxable muni deal since 2010. It is rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.

The elimination of advance refundings on tax exempt bonds in December’s tax overhaul leaves the state few options for refinancing the 2009 bonds outside of selling them as taxables, said California’s deputy treasurer for public finance.

Morgan Stanley is scheduled to price the county of Sacramento’s $588.025 million of airport system senior revenue refunding and subordinate revenue refunding bonds, featuring both alternative minimum tax and non-AMT bonds on Thursday.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended April 13 were from New York, New Jersey and Illinois issuers, according to Markit.

In the GO bond sector, the New York City 3.375s of 2038 traded 80 times. In the revenue bond sector, the N.J. Tobacco Settlement Financing Corp. 5s of 2046 traded 41 times. And in the taxable bond sector, the Illinois 5.1s of 2033 traded 12 times.

Week's actively quoted issues
Puerto Rico and New York names were among the most actively quoted bonds in the week ended April 13, according to Markit.

On the bid side, the Puerto Rico Commonwealth GO 8s of 2035 were quoted by 45 unique dealers. On the ask side, the NYS Dormitory Authority revenue 5s of 2046 were quoted by 101 dealers. And among two-sided quotes, the Puerto Rico Commonwealth GO 8s of 2035 were quoted by 28 unique dealers.

Previous session's activity
The Municipal Securities Rulemaking Board reported 44,092 trades on Thursday on volume of $16.76 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 15.336% of the market, the Empire State taking 15.492% and the Lone Star State taking 10.423%.

Lipper: Muni bond funds saw outflows
Investors in municipal bond funds continued to pull cash out of the funds ahead of tax day, according to Lipper data released on Thursday.

The weekly reporters saw $244.735 million of outflows in the week ended April 11, after outflows of $247.111 million in the previous week.

Exchange traded funds reported inflows of $126.962 million, after inflows of $25.411 million in the previous week. Ex-ETFs, muni funds saw $371.697 million of outflows, after inflows of $272.521 million in the previous week.

The four-week moving average turned negative at -$2.401 million, after being in the green at $143.568 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.

Long-term muni bond funds had inflows of $78.278 million in the latest week after inflows of $85.357 million in the previous week. Intermediate-term funds had outflows of $10.979 million after outflows of $29.999 million in the prior week.

National funds had outflows of $184.593 million after outflows of $166.142 million in the previous week. High-yield muni funds reported inflows of $172.574 million in the latest week, after inflows of $186.428 million the previous week.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.
Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.