Sizable transportation, health care, utility, and state general obligation deals will highlight a plentiful new-issue calendar that calls for an estimated $4.56 billion in new volume this week, according to Thomson Reuters.
Despite it being a short week due to yesterday's Presidents Day observance, more debt expected than last week, when a revised $4.16 billion in competitive and negotiated deals were priced.
Deal size and variety are also up from last week, when a $324.9 million sale of civic center revenue refunding bonds from Dallas was among the largest issues.
The deal, insured by Assured Guaranty Corp., priced last Tuesday by JPMorgan with a 51/4% coupon on the 2038 final maturity with a 5.41% yield at a time when the triple-A insured scale in 2038 yielded a 4.95%, according to Municipal Market Data.
This week the primary market activity kicks off in the Southeast, anchored by a $600 million Georgia State Road and Tollway Authority highway revenue bond offering, while a flurry of deals is also forecast for the Northeast region.
The Georgia deal is scheduled to be priced on Wednesday by Barclays Capital, following a retail order period today, and consists of $480 million of federal highway grant anticipation revenue bonds and $120 million of federal highway reimbursement revenue bonds.
Both series will mature serially from 2010 to 2029 and will be rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Health care issuers in three states will come to market this week to issue a combined $571 million of debt on behalf of borrower Ascension Health Obligated Group in what will be one of the largest health care deals to be priced in months and which is a conversion of variable-rate weeklies to fixed-rate debt.
The multi-state offering will be priced by book-runner Citi on Wednesday and is rated Aa1 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.
The deal includes a conversion of $371.7 million of variable-rate revenue bonds in the weekly mode originally issued by the Connecticut Health and Educational Facilities Authority and the Michigan State Hospital Finance Authority, as well as a $198.4 million conversion of variable-rate bonds in a weekly mode originally issued by the Indiana Health Facility Financing Authority. According to sources familiar with the deal, it will mature out to five years, but the exact structure of the issue will be determined by the prices and market conditions on Wednesday.
Among the flurry of Northeast paper expected, the largest will be a $511 million sale of new-money and refunding GOs bonds from Massachusetts that will be priced by Goldman, Sachs & Co. on Thursday, following a two-day retail order period that begins today. On Friday, an underwriter said the deal was reduced slightly from the original $526.7 million that appeared on the POS, since the refunding portion is subject to change pending market conditions.
The deal will be structured with serial bonds maturing from 2010 to 2029 with term bonds in 2034 and 2039. The commonwealth's outstanding GO debt is rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.
Nearby Connecticut will also issue GOs when M.R. Beal & Co. prices its $300 million sale on Wednesday, following a two-day retail order period that began last Friday and concludes today.
A combination of the timing of the deal and the all-serial structure from 2010 to 2029 created strong demand during the early part of Friday's retail order period, according to Jacob Alpert, executive vice president of sales, trading, and underwriting at M.R. Beal.
"The state of Connecticut has not been in the market in a while so we hope that will help the demand," he said. In addition, retail investors have been a "predominant force" in the market and have preferred high-quality GO credits in the serial range from many new issues lately, Alpert said.
"Most recent market events have caused the more highly rated GO essential-service bonds to fare better and we expect this deal will be right up there ... it's pretty pristine," he said.
The state's full faith and credit GO pledge is rated Aa3 by Moody's and AA by Fitch and Standard & Poor's.
A $375 million sale of new-money and refunding revenue bonds is also on tap from the New York City Municipal Water Finance Agency on Wednesday by senior book-runner Depfa First Albany Securities LLC after a retail order period today.
The fixed-rate deal includes $100 million of refunding bonds and $275 million of new-money bonds, whose proceeds will be used to finance ongoing capital improvement projects to the New York City water and sewer system.
The bonds have ratings of Aa3 from Moody's, AA-plus from Standard & Poor's, and AA from Fitch, and the structure of the deal was still being finalized by the firm on Friday.
Rounding out the Northeast activity will be a $206 million revenue sale from the New York State Thruway Authority, which is planned for pricing by Banc of America Securities LLC on Thursday, following a retail order period set for tomorrow.
The bonds, which are slated to mature from 2010 to 2029, are rated AA by Standard & Poor's and AA-minus by Fitch.
One of the other sizable deals expected to price this week is a $273.5 million electric system revenue sale from Florida's JEA being priced by Morgan Stanley on Thursday, after tomorrow's retail order period. The bonds are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch, but the structure of the deal was not yet available at press time on Friday.
In the competitive market, meanwhile, the only relatively sizable deal is a $115 million Rochester, N.Y., bond anticipation note sale expected to be priced on Wednesday. The one-year notes are rated MIG-1 by Moody's and SP1-plus by Standard & Poor's.
