Nearly $10 billion of new municipal bonds are expected to be issued this week - all the more interesting because FINRA just announced it had fined four firms for sales of new issue muni securities. The large underwriting card also coincides with the start of a new fiscal year for most states - July 1. 

Over the last few months, new bond sales have been rising as the market has been healing from a period of turmoil at the start of the year.  Fears of widespread defaults in the aftermath of the U.S. recession have begun to ease and buyers have returned to the market.

Deals this week are expected from the states of Oregon and Maryland, as well as the cities of Chicago and New York. New issuance has been running at its lowest annual pace in more than 10 years.  It dried up on largely on account of 4 factors:

• market stress.
• austerity among local governments, where borrowing for borrowing became somewhat "politically incorrect."
• state tax revenues are rising, though they've not returned to levels seen before the recession.
• local borrowers have increasingly turned to private transactions - either bank loans or direct purchases of their bonds by banks - a trend that's expected to continue.

[Financial Times, 7/18/11]

To read the 4 FINRA cases noted above, go to:   [Today's WWW Story] .