Muni Minute

While volume will be under $4 billion, strong demand should continue as the muni market is sound technically and investors are flush with cash. Investors are feeling bullish.

Coming off the primary market's most robust week of issuance this year, investors will see more than $6 billion hit the calendars this week – with almost a third of that issuance coming from one well-known California issuer.

This week the municipal bond market is getting what it wants — and what it needs — more supply. Almost $10 billion of new deals are on tap in a calendar that will have something for almost everybody.

While low volume is frustrating for investors, scarcity is driving demand as buyers have realized they cannot wait for something that will not come. Although this week lacks a large deal, it is full of medium sized deals from a variety of issuers.

The Federal Open Market Committee meets this week, which means a light primary market calendar of $4.3 billion. With year-over-year core PCE seen at or near 2%, its statement will acknowledge rising inflation.

A $1.4 billion sale from New York Transportation Development Corp., for Delta’s redevelopment at LaGuardia Airport is the bellwether deal of a near $8 billion week of new issuance. This will mark the first time in six years that Delta has issued in the tax exempt market and will be the second largest airline special facility bond ever completed in the municipal market.

The 2017 top municipal bond issuer is bringing yet another two-billion dollar deal to market, this time around however California will be selling taxable bonds. The new tax legislation leaves the Golden State few options to refinance the 2009 bonds, but the taxable route should have the way for buyers overseas.

Clark County, Nev.’s $648 million Las Vegas stadium bond deal for the NFL’s Raiders is the first since Congress toyed with the idea last year of eliminating the tax-exemption for sports facilities.

The Tobacco Settlement Corp. is coming to market with over $3 billion of municipal bonds in a refunding deal that takes out all of the securities issued back in 2007.

The Constitution State is bringing the largest negotiated deal to a supply starved market this week — although the state is faced with fiscal challenges, it hopes the big sale satisfies investors, during a time when munis are attractive but supply is scarce.

The Federal Open Market Committee meets this week, and while a rate hike is widely expected, and priced in, the municipal market will look to the Summary of Economic Projections for the future path of rates.

The New York City Transitional Finance Authority heads to market this week with over $1 billion of building aid revenue bonds that will be used to fund education capital projects and refund outstanding bonds.

Municipal investors have been supply starved but will get just what the doctor ordered; a nice big dose of supply. The mini surge will feature two billion dollar deals – one of the high grade variety and the other more of a high yield deal. With volatility in the atmosphere and big deals few and far between, investors should jump to grab the paper since who knows when the next big deal is coming.

The municipal bond market will see $4.8 billion of bonds fly in this week topped by deals from Baltimore County, Alabama Black Belt Gas and the New York State Thruway along with two airports offerings from Houston and Los Angeles.A smorgasbord of bonds is heading our way this week. The new-issue deal calendar stands at $4.8 billion.Baltimore County, Maryland, headlines the slate with four competitive sales of notes and bonds totaling $837 million.Alabama's Black Belt Energy Gas District will sell a $650 million offering.The New York State Thruway Authority will also make a splash with a $600 million deal.And two airport deals -- a $435 million sale from Houston, and a $376 million offering from Los Angeles -- are also making waves.

A parched municipal bond market will get what buyers want: a hefty blast of new supply this week. And it’s coming from two big, market-friendly names – New York City and Los Angeles Schools.

The municipal bond market will be combing through President Trump’s $1.5 trillion infrastructure and budget proposal to see what’s in store for the public finance sector.

Action in the primary muni market has been slow and low in 2018 and yields have spiked recently, with investors increasingly moving to the sidelines to wait for calmer waters. However, some view this as a buying opportunity and are urging others to jump in with them.

Will President Trump trumpet infrastructure in his State of the Union address? Will there be specifics on a plan? Will the Federal Open Market Committee recommend a rate hike? The market will be watching.

State officials cited the need to package its $800 special tax obligation bond sale separately from their general obligation credit.

Chicago’s Sales Tax Securitization Corp. returns to the municipal bond market this week, offering high-yielding, high-rated paper to buyers hungry for supply.