Municipal volume is set to rise to almost $7.3 billion, led by five competitive issues totaling about $1.2 billion from the Dormitory Authority of the State of New York.
Long-term municipal bond volume for the week of June 8 is expected to total $7.299 billion, according to estimates from Ipreo and The Bond Buyer. Volume for the past week totaled $6.051 billion, according to Thomson Reuters.
The estimate is comprised of $4.224 billion in competitive offerings and $3.075 billion in negotiated deals, in contrast to the past week's $4.2 billion of negotiated and $1.8 billion competitive.
"With [the week's] amount being competitive issues, this puts a significant amount of dealer capital at risk," said Randy Smolik, Municipal Market Data Senior Market Analyst in a market report.
Alan Schankel, a managing director at Janney Capital Markets, said that competitive issues do put more dealer capital at risk in theory, but said that the ratio in upcoming week's schedule probably is more reflective of a drop in negotiated issues than an increase competitives.
"The competitive issues are on par with what we are used to, we will just be seeing fewer negotiated deals," said Schankel. "I am more concerned about the negative fund flows but I suspect there will be plenty of demand for the upcoming issues."
Lipper FMI late Thursday reported $380.735 million of outflows from municipal bond funds in the week ended June 3 a fifth consecutive week of losses. Yields were rising four out of five sessions for the week of June 1, but Schankel doesn't believe that will hurt sales next week.
"I don't think the fact that yields are higher because of European stuff and Friday's employment report for May will much have of an impact," he said. "They might pay a little higher interest rate but overall the calendar is on the light side and will be pretty digestible."
The DASNY sales consist of $393.32 million of Series 2015B tax-exempt Group B state personal income tax revenue bonds; $415.87 million of Series 2015B tax-exempt Group C state personal income tax revenue bonds; $241.36 million of Series 2015B tax-exempt Group A state personal income tax revenue bonds; $97.62 million of Series 2015D taxable state personal income tax revenue bonds; and $29.92 million of Series 2015C tax-exempt state personal income tax revenue bonds.
DASNY is returning to the market quickly after Citi priced its $504 million North Shore Long Island Jewish Health System bonds for the issuer the week of June 1.
Also on the competitive side are four separate deals from the state of Georgia totaling around $1 billion. The bidding war for these bonds will be on Tuesday.
The Peach State sales consist of $275.32 million of Series 2015A general obligation bonds, Tranche 1; $288.03 million of Series 2015A GOs, Tranche 2; $265.1 million of Series 2015B taxable GOs, Tranche 1; and $279.15 million of Series 2015C GO refunding bonds.
Fitch has a rating of triple-A on the Georgia bonds, with a rating outlook of stable.
"The state's long-term liability burden is low, and overall debt management is conservative. While Georgia issues bonds regularly for capital needs, amortization of principal is rapid," said Fitch in a report. "Additionally, the state fully funds its actuarially determined employer contributions (ADECs, formerly ARC) for pensions, keeping the unfunded liability very manageable. Georgia has a long history of conservative revenue estimation and balanced operations, and consistently takes timely action to address fiscal weakness. The state capitalized on recent revenue growth to make substantial progress in rebuilding reserves."
The city of Atlanta is scheduled to competitively offer $252 million of Series 2015 GO public improvement bonds on Wednesday. The bonds are rated Aa2 by Moody's and AA by Standard and Poor's.
In the negotiated sector next week, RBC Capital Markets is slated to price Miami-Dade County, Fla.'s $534.18 million deal consisting of Series 2015A aviation revenue and refunding bonds, subject to the alternative minimum tax, and Series 2015B non-AMT aviation revenue refunding bonds. The deal is rated A by S&P and Fitch Ratings and AA-minus by Kroll Bond Rating Agency.
"The revenue portion of the deal will be $75 million," said Frank Hinton, director of the division of bond administration, for Miami-Dade County. "We are trying to restructure our debt and we are projecting around $16.6 million in net present value savings from the refunding portion of this sale."
Citi is expected to price the Erie County Industrial Development Agency's $240.175 million of school facility refunding revenue bonds, Series 2015A for the city school district of the city of Buffalo project.
RBC is expected to price the Cleveland Municipal School District, Ohio's $200 million of unlimited tax Series 2015 tax-exempt and Series 2015B taxable general obligation bonds on Wednesday. The deal is backed by the Qualified School Construction Bond Program, Direct Payment, and rated Aa2 by Moody's and AA by S&P and Fitch.
Maricopa County in Arizona is scheduled to come with $184.985 million of certificates of participation, Series 2015. JPMorgan is expected to price the COPs on Tuesday and it is anticipated they will mature serially from 2017-2018. The deal is rated Aa1 by Moody's and AA-Plus by both S&P and Fitch.
JPMorgan is also expected to price the housing and redevelopment authority of the city of St. Paul Minnesota's $150.080 million of hospital facility revenue bonds for the HealthEast Care System project on Thursday. The bonds are expected to mature serially from 2015-2030, with term bonds after that. The deal is rated BBB-minus by S&P and Fitch.
"Georgia, Miami-Dade and DASNY are all prime names and should see pretty decent demand," Schankel said. "I don't think there will be any difficulty in selling deals next week."
