MEAG and DASNY Help Plump Up $6.28 Billion Slate

After digesting more than $6 billion of new volume last week, the municipal market is again expected to make room for an additional $6.28 billion in estimated new supply planned this week, according to Ipreo LLC and The Bond Buyer.

The market saw a revised $6.25 billion in new volume last week, according to Thomson Reuters.

This week’s primary activity will be led by a $2.4 billion revenue bond sale from the Municipal Electric Authority of Georgia, which consists of both tax-exempt debt and taxable Build America Bonds.

Book-runner Goldman, Sachs & Co. had not yet finalized the pricing date of the issue on Friday, according to an underwriter.

The deal includes Project J bonds that total $1.14 billion and consist of $1.11 billion of taxable BABs in Series 2010A that mature from 2018 to 2057, and $26.6 million of tax-exempt bonds in Series 2010B to mature from 2017 to 2021 and in 2040.

There are also Project M bonds that total $972.9 million and consist of $953.24 million of taxable BABs in Series 2010 A to mature from 2019 to 2057, and $19.68 million of tax-exempt bonds in Series 2010 B to mature from 2017 to 2029 and in 2040.

The MEAG deal also includes Project P bonds that total $419.1 million. They are structured as $410.8 million of taxable BABs in Series 2010A to mature from 2018 to 2057, and $8.24 million of tax-exempts in Series 2010B maturing from 2017 to 2020 and in 2040.

A New York underwriter said the deal should command keen interest amid a manageable slate of deals this week. “We don’t see the calendar as very heavy so it should be a pretty good focus,” he said.

The Series J and M bonds are expected to be rated A2 by Moody’s Investors Service and A-plus by Standard & Poor’s and Fitch Ratings. The Series P bonds are rated Baa2 by Moody’s and A-minus by Standard & Poor’s and Fitch.

Proceeds from the billion-dollar sale will be used to finance the construction of new projects, including MEAG’s share of two new nuclear units at the Plant Vogtle facility.

They will also refinance a portion of outstanding 2009 notes, fund certain capitalized interest, make a deposit in the debt-service reserve fund, and pay the cost of issuance, according to the preliminary official statement.

The Dormitory Authority of the State of New York, meanwhile, will make its second appearance in the primary market in as many weeks as it prepares to issue $634.4 million of personal income-tax general purpose revenue bonds. The negotiated deal will be led by RBC Capital Markets LLC on Wednesday following a retail order period tomorrow.

The three-pronged deal includes $373.9 million of tax-exempt bonds in Series 2010A, $46.7 million of traditional taxable bonds in Series 2010 B, and $213.7 million of taxable BABs in Series 2010 C.

The issue is expected to be rated AAA by Standard & Poor’s and AA-minus by Fitch.

New-money proceeds from Series 2010A are being used to finance capital grants and various environmental and infrastructure projects.

New-money proceeds from Series 2010B will be used to fund capital expenditures for environmental infrastructure projects, and provide state matching contributions for the water-pollution control state revolving fund and the Western New York Nuclear Service Center.

A portion of both the Series A and B bonds will also be used to current refund $333 million of the authority’s outstanding mental health services revenue bonds issued as auction-rate securities and variable-rate demand bonds.

Last week, DASNY came to market with $253 million of mental health facilities revenue refunding bonds priced by book-runner Ramirez & Co. last Tuesday.

The bonds, which are rated AA-minus by Standard & Poor’s and A-plus by Fitch, carried a final 2025 maturity that was priced to yield 4.32% — 97 basis points cheaper than the generic triple-A general obligation scale in 2025 at the time of the pricing, according to Municipal Market Data.

A $400 million sale of revenue debt on behalf of Catholic Healthcare East is headed to market as a composite issue sold by municipalities in seven states: Connecticut, North Carolina, Massachusetts, Georgia, Florida, Pennsylvania, and New Jersey.

Bank of America Merrill Lynch is slated to price the offering on Wednesday following a retail order period planned for tomorrow. Standard & Poor’s rates the CHE bonds A and Fitch rates  them A-plus. The structure was not available at press time on Friday.

The CHE issue is expected to be jointly issued by Tampa, Fla., the Massachusetts Health and  Educational Facilities Authority, the Fulton County, Ga., Development Authority, the North Carolina Medical Care Commission, the New Jersey Health Care Facilities Financing Authority, the Connecticut Health and Educational Facilities Authority, and the Saint Mary’s Hospital Authority in Pennsylvania.

Proceeds will be used to refinance various 1998, 1999, 2007 bonds, and fund $50 million in various projects.

A $2 billion sale of California general obligation bonds originally scheduled for pricing last week has been rescheduled for March 11, following a two-day retail order period by book-runners Morgan Stanley and JPMorgan, according to the state treasurer’s office.

The deal was pulled last week by the treasurer’s office after similar cash-flow management legislation got held up, but was approved by the California Assembly Thursday.

The bill is structured to give rating agencies and investors’ confidence that the state government will be able to manage its cash-flow issues without a repeat of 2009, when it had to pay many creditors with IOUs to preserve money for debt service and other priority payments.

In addition to the upcoming tax-exempt GO sale, the California treasurer’s office is still planning to sell about $2 billion of taxable GOs later this month, including a BAB component.

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