NEW YORK, June 21 (Reuters) - U.S. municipal bond sales next week are expected to soar to $14 billion - the highest weekly level so far this year, according to Thomson Reuters estimates on Friday. The previous high was the week of April 7 when sales totaled $11.6 billion, according to Thomson Reuters Data. Issuance in the $3.7 trillion muni market typically builds in June and July to take advantage of those peak months for cash flowing back to investors from coupon payments and bond redemptions. Total sales this week had been initially estimated at $6.8 billion but were revised to $4.9 billion after several issuers postponed their deals amid a steep drop in prices and rise in yields on Thursday. New York's Metropolitan Transportation Authority was among the seven issuers that delayed the sale of $1.5 billion of debt. Some of those deals could price as early as next week. Separately, Philadelphia had been expected to sell $400 million of general obligation bonds next week, but that sale was also put on hold. Issuers have sold nearly $162 billion of debt so far this year compared with $181 billion during the same period in 2012, according to Thomson Reuters data. However, rising interest rates could bring an end to the surge of refinancing deals that has lasted more than a year, said Dominic Vonella, managing analyst at Municipal Market Data. "There is the potential for a lot of refinancing issuances to be postponed," Vonella said. Negotiated sales next week are expected to total $12.2 billion in 91 issues, compared with a revised $3.6 billion in 74 deals this week. Illinois will offer $1.3 billion of fixed-rate bonds in its first general obligation debt sale since the state's ratings were downgraded by Moody's Investors Service and Fitch Ratings earlier this month. The lowest-rated state has a huge unfunded public pension liability and structural budget imbalance. The deal, scheduled for pricing on Wednesday through Wells Fargo Securities, Siebert Brandford Shank & Co, and Stifel, is structured with serial maturities from 2014 through 2038 and a term bond, according to the preliminary official statement. On Wednesday, the city of Los Angeles will sell $1.3 billion of tax and revenue anticipation notes. The issue is structured with 2014 maturities on Feb. 27, May 1, and June 26, according to the POS. Ahead of the sale the notes were rated MIG 1 by Moody's and F1-plus by Fitch. Indiana's Posey County will sell nearly $1.26 billion of economic development revenue refunding bonds for Midwest Fertilizer Corp. The bonds were originally sold through the Indiana Finance Authority in December 2012, but Indiana Governor Mike Pence yanked incentives for the project in May over concerns a Pakistani company involved in the fertilizer plant project makes products used in improvised explosives that kill and injure U.S. troops in Afghanistan. The deal through Guggenheim Securities is expected to price on Tuesday. Competitive deals are expected to total $1.8 billion in 99 sales, compared with $1.3 billion in 131 issues in the week ended June 21. On Wednesday, Georgia will sell a four-part, $842.3 million general obligation bond issue. The deal consists of $427.4 million of new bonds with serial maturities from 2014 through 2033 and $163.2 million of new taxable bonds with serial maturities from 2014 through 2033, according to the POS. It also includes $94.4 million of taxable qualified school construction bonds with serial maturities from 2014 through 2033. The state will also sell $13.7 million of refunding bonds with serial maturities from 2019 through 2024 and another $143.6 million of refunding bonds with serial maturities from 2022 through 2024. The bonds are rated AAA with a stable outlook by Fitch.