Muni Minute: $10.2B Calendar Chock-Full of High Grade Paper

In the latest episode of Muni Minute, we focus our spotlight on this week’s primary calendar, and how much of it is extremely high grade paper. California leads the way with at least $2.4 billion and Maryland trails with $1.19 billion of its top rated, triple-A paper. The timely arrival of large amount of high quality bonds should help set the nature and course of this week’s market.

VOICEOVER: After weeks of sparse issuance, the primary market is set for three robust deals from well-known issuers whose paper is always in high demand. The State of California will be bringing the largest sale of the year so far, as the Golden State is scheduled to come with $2.4 billion of various purpose GO bonds and refunding bonds. If demand is strong, the size of the offering could grow, perhaps substantially. California paper is expected to continue to have strong demand, especially when it comes in size, according to one fund manager. Though some investors may be full on the credit, the $1.9 billion refunding may mean that some buyers will be looking to replace refunded bonds.

Also in the primary this week, Maryland is expected to sell three separate competitive deals totaling roughly $1.19 billion of triple-A rated paper. The New York City TFA should also bring an $800 million deal to market. The issuance is timely, as bond markets are preparing to break out of a two month trading range and that the high profile names can set the tone and direction of the market going forward. I’m Aaron Weitzman. This has been your Muni Minute.