July 29, 2016 / 8:36 PM / a year ago

Minnesota to lead U.S. municipal bond issuance next week

July 29 (Reuters) - Minnesota will be back in the U.S. municipal bond market next week with a total of $787,945 million in general obligation bonds following a recent credit upgrade, kicking off a busy start to the normally sleepy month of August.

Minnesota’s offers consist of $301,195 million of series 2016D GO refunding bonds, $264,250 million of series 2016A GO bonds for various purposes, $215,000 in 2016B GO bonds for state trunk highway bonds, and $7,500 million in series 2016C GO taxable state bonds for various purposes.

The bonds are scheduled to hit the market on Tuesday.

On Thursday, Fitch Ratings raised Minnesota’s credit rating from ‘AA+’ to ‘AAA,’ its highest rating level.

“Minnesota has shown significant financial resilience through downturns and a strong commitment to bolstering its financial position as conditions improve,” Fitch said.

“The ‘AAA’ rating reflects Minnesota’s solid and broad-based economy, a revenue structure well designed to capture economic growth, a low liability burden, and strong control over revenues and spending,” Fitch said.

Overall, an estimated $11.87 billion of debt will hit the municipal bond market next week, a healthy amount for the first week of August, which typically is one of the slower months as market participants take vacation.

The weekly average for debt issuance this year is about $8.2 billion.

Analysts on Friday said there was enough demand in the market to justify the issuance level.

Total issuance next week will be comprised of $7.73 billion from the negotiated calendar and $2.75 billion in competitive offerings, according to preliminary Thomson Reuters data. (Reporting by Rory Carroll; Editing by Jonathan Oatis)

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