Muni sales volumes head higher US state and city governments are boosting sales of municipal bonds this week, trying to raise up to $6.6bn in funds amid higher borrowing costs in the aftermath of the largest municipal bankruptcy in US history. The states of Washington, Minnesota and Alabama are some of the issuers offering general obligation bonds in the coming days as the $3.7tn market for tax-exempt securities is still recovering from Detroit's bankruptcy filing last month. This week's volume is higher than the weekly average of muni offerings so far in 2013, at $5.5bn, according to Thomson Reuters MMD. It also comes after some issuers in Michigan, such as Genesee County, postponed planned offerings on August 1. While the rebound in offerings is a sign the muni market is stabilising, state and municipal borrowers may still have to offer price concessions in order to lure investors back into the securities, analysts said. If anything, Detroit's bankruptcy took a lot of froth out of this market. It also put an end to the pattern among issuers of being able to sell any bond at any price," said Adrian Miller, director of fixed income strategy at GMP Securities. People will be looking closely at each of these deals before jumping in. Munis have been under pressure in recent months because of the looming end of the Federal Reserve's quantitative easing programme, which triggered hefty outflows from funds investing in the securities. The sell-off accelerated in the past couple of weeks, however, after Detroit's bankruptcy. As prices fell, average yields on long-term munis rose to two-year highs and stood at 4.22 per cent on Monday. This week's muni offerings also include sales by school districts, water and sewer systems, and general funding for universities. Most of the offerings are slated for Wednesday, when Alabama, Washington and the Metropolitan Transportation Authority of New York are expected to sell more than $1.23bn combined in general obligations. Local governments across the US are also facing potential reviews of their credit ratings and higher funding costs if the proposed treatment of general obligation bonds in Detroit is endorsed by a bankruptcy judge. Still, overall municipal defaults have been rare. Including all of Detroit's debt in default, $6.7bn in municipal defaults took place in the first half of 2013, or just 0.18 per cent of the total market, according to data compiled by BlackRock. Many observers of munis "have been quick to jump to the conclusion that the market is in dire straits. This simply is not the case," said Peter Hayes, head of BlackRock's municipal bonds group. In late 2010 and 2011 "spooked investors unwisely sold at exactly the wrong time, costing them a significant amount of money."