Traders anticipate Tuesday to be light both in the primary and secondary as the market holds its collective breath for Wednesday's heavy day of issuance. There are no deals scheduled over $50 million in either the competitive or negotiated markets Tuesday.
Wednesday, however, will bring the week's two largest deals: a $2.8 billion California revenue anticipation notes, and a $200 million New York City Municipal Water Finance Authority revenue bond sale.
Secondary activity is expected to follow Wednesday's deal-heavy day as investors prepare their portfolios for the new debt, traders predicted. After nine months of consistent inflows, portfolios have become saturated, making it necessary for buyers to adjust and sell their positions in order to make room for new debt, as previously reported by The Bond Buyer.
While Monday and Tuesday have promised to be slow, volume this week is nearly double last week's. Overall volume is expected to grow to $3.11 billion, according to Ipreo, from last week's revised calendar of $1.75 billion.
Wednesday will lead the primary, with two additional large deals slated to price.
Wells Fargo Securities will bring $286.43 million of Pennsylvania Turnpike Commission special obligation taxable securities to market on Wednesday. Structured to mature serially from 2014 to 2027, the bonds are rated Aaa by Moody's Investors Service.
Meanwhile, the $274 million Minnesota-St. Paul Airports Commission revenue offering will be priced by Citigroup Global Markets on Wednesday with a serial structure and single A rating from both Standard & Poor's and Fitch.
The two-pronged deal will consist of $221 million of bonds not subject to the alternative minimum tax structured to mature from 2016 to 2035, as well as $47 million of AMT-subject bonds that are structured to mature from 2016 to 2026.
The Treasury market weakened Tuesday morning, with the two-year note softening two basis points to 0.55% from Monday's close, the 10-year climbed three basis points to 2.50% and the 30-year rose one basis point to 3.24%.
