(Reuters) – Sales of U.S. municipal bonds and notes next week will total about $4.9 billion, according to Thomson Reuters estimates, a decrease from the more robust and much-heralded issuance levels so far this year.
No deal next week is expected to top the $275.4 million offering from the Dormitory Authority of the State of New York, a late entry on Thursday to the negotiated calendar.
The authority is selling State University of New York dormitory facilities revenue bonds on Thursday through lead manager Siebert Brandford. The bonds will refund outstanding lease revenue bonds the authority issued from 2003 through 2007, according to the preliminary official statement.
Separately, the authority plans to price $68.9 million of Orange Regional Medical Center Obligated Group Revenue bonds, rated Ba1 by Moody’s Investors Service, through lead manager JP Morgan.
Next week’s low level of issuance is a change from the first quarter, when primary muni sales spiked upward, driven mostly by refundings. By comparison, this week an estimated $9 billion of muni bond deals priced.
The low-interest rate environment has been favorable for refundings, with a “subdued transition upward across the curve” for the rest of the year expected, CreditSights analysts Isaac Codrey and Howard Sitzer said in a commentary on Friday.
With that interest rate outlook, “we would continue to expect strong refunding volumes over the remaining course of the year, just not at the remarkable levels that were realized” in the first quarter of 2015, they wrote.
NEW YORK, APRIL 24
(Reporting by Hilary Russ; Editing by Jonathan Oatis)