Muni Investors Eager for Week's Supply

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Municipal bond issuers may find healthy demand in the coming week, as investors look to put reinvestment money to work.

Volume for the week of July 6 is estimated to come in at $4.9 billion, according to Ipreo and The Bond Buyer, compared with the revised total of $3.6 billion priced for the week of June 29, according to Thomson Reuters. There will be a projected $3.6 billion of negotiated deals and $1.3 of competitive sales.

"We expect to see vibrant demand next week for new issue supply as reinvestment money is in abundance at this time of year due to bonds maturing and paying coupons," said Michael Pietronico, chief executive officer of Miller Tabak Asset Management. "Given the heightened volatility in the equity markets globally it is our sense that the recent rise in yields should draw significant interest from retail and institutional investors."

The biggest deal of the week is coming from the North Carolina Municipal Power Agency Number 1. Its $463.110 million of refunding bonds are scheduled to be priced by Morgan Stanley on Thursday. The issue is initially structured as Series 2015 A, B and C refunding bonds, Series 2015 D taxable refunding bonds and Series 2015 E forward delivery bonds. The issue is rated A by Standard & Poor's and Fitch Ratings.

The Illinois State Toll Highway Authority's $400 million of Series 2015A toll highway senior revenue bonds are expected to be priced by Bank of America Merrill Lynch on Wednesday. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by S&P and Fitch.

This deal is the first of two new-money borrowings to finance a record year of capital spending. The $1.6 billion of capital spending planned this year is part of the 15-year, $12 billion Move Illinois capital program launched in 2011. The authority operates 286 miles of toll highways in 12 counties in northern Illinois.

JPMorgan is slated to price Austin, Texas' $290 million of Series 2015A and taxable Series 2015B wastewater system revenue refunding bonds. The issue is initially structured as serials maturing from 2016 through 2035. The bonds are rated Aa2 by Moody's, AA by S&P and AA-minus by Fitch.

Citigroup is expected to price on Thursday the Colorado Health facilities Authority's $206 million of Series 2015A health facilities revenue and revenue refunding bonds for the Evangelical Lutheran Samaritan Society project on Thursday. The bonds are rated A-minus by Fitch and are expected to mature serially from 2016-2036, with term bonds in 2040 and 2045.

Citi is also set to price the Massachusetts Port Authority's $179 million of Series 2015A non-AMT and Series 2015B AMT revenue bonds on Wednesday. The bonds are rated AA by S&P.

In the competitive sector, the Central Florida Expressway Authority is set to sell $194 million of Series 2015 senior lien revenue bond anticipation notes on Wednesday. The BANs are rated A2 by Moody's and A by S&P and Fitch.

Aaron Weitzman is a reporter for The Bond Buyer.

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