(Bloomberg) -- Municipal bond sales in the U.S. are set to increase in the next month while the amount of redemptions and maturing debt rises.
States and localities plan to issue $14.5 billion of bonds over the next 30 days, according to data compiled by Bloomberg. A week ago, the calendar showed $11.4 billion planned for the coming month. Supply figures exclude derivatives and variable- rate debt. Some municipalities set their deals less than a month before borrowing.
University of California plans to sell $2.8 billion of bonds, while New York City has scheduled $1.33 billion, including $800 million of negotiated notes and $528.5 million of competitive securities. Dallas will offer $578.6 million and Connecticut will bring $500 million to market.
Municipalities have announced $14.5 billion of redemptions and an additional $9.7 billion of debt matures in the next 30 days, compared with the $23.1 billion total that was scheduled a week ago.
Issuers from New York have the most debt coming due with $2.5 billion, followed by California at $1.16 billion and Wisconsin with $488 million. California has the biggest amount of securities maturing, with $803 million.
MARKET CONTRACTS
The $3.5 trillion municipal market contracted by $7.37 billion last month. Sales of $32 billion compared with redemptions and maturing debt that totaled $39.3 billion. Last year, the market shrank by 4%. This year, maturities are poised to drop 38% to $176 billion from the 2014 levels.
Investors added $1.03 billion to mutual funds that target municipal securities in the week ended Feb. 25, compared with $274 million in the previous period, according to Investment Company Institute data compiled by Bloomberg.
Exchange-traded funds that buy municipal debt increased by $17.9 million last week, boosting the value of the ETFs 0.11% to $16.2 billion.
State and local debt maturing in 10 years now yields 96.34% of Treasuries, compared with 101.84% in the previous session and the 10-year average of 93.59%, Bloomberg data show.
Bonds of New York and Michigan had the best performance over the past year compared with the average yield of AAA rated 10-year securities, the data shows. Yields on New Yorks securities narrowed 10 basis points to 2.17% while Michigans declined 9 basis points to 2.44%.
Puerto Rico and New Jersey handed investors the worst results. The yield gap on Puerto Rico bonds widened 69 basis points to 9.72% and New Jerseys rose 17 basis points to 2.79%.
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