Muni Minute: Primary Poised for $10B Week

The market has been volatile and choppy for weeks now and issuers are hoping that things calm down. The volume certainly isn't sputtering, as we are expecting nearly $10 billion of issuance, including some big time issuers from the Northeast – with a variety of credits, including some that have baggage with headline risks.

VOICE OVER: Big name Northeast issuers will be hitting the rough water that is currently the Muni Market, as yields have gone up almost every day since the election, with notable spikes of 22 basis points on November 14th and 10 basis points on November 30th. Although this type of volatility has occurred before, it is extremely unwelcomed by most participants, as deals are coming extremely cheap in order to get done.

New York City is expected to hit the market with $1 billion of GOs, which will be separated into one negotiated deal and two competitive taxable deals.

Pennsylvania is expected to splash into the market with $613 million of GOs and all eyes will be on the Keystone State as it is hampered by problems with its budget, as the Independent Fiscal Office projects a $500 million deficit for the current year, which could balloon up to $1.7 billion.

Another "problem state," Connecticut, is scheduled to come with a $320 million refunding. Also, the Massachusetts Department of Transportation with a total of 642 million, as the state recently converted its turnpike to all-electronic tolling. Those issuers and others will certainly hope the market has calmer waters ahead. I'm Aaron Weitzman and this has been your Muni Minute.