NTTA, N.Y. TFA and Two Colorado Deals Lead Light Calendar

A $1 billion financing for the North Texas Tollway Authority, a $500 million offering from the New York Transitional Finance Authority and a pair of Colorado deals will lead the still-paltry new-issue activity in the municipal bond market.

Market participants said the light volume might be a blessing in disguise, given the recent weak bidding that continues to plague the market.

That weakness could present challenges to issuers looking to sell an estimated $3.29 billion this week, according to Ipreo LLC and The Bond Buyer.

“The tension between supply and fund flows continues as we saw another $430 million of outflows this week,” a New York underwriter at a large Wall Street firm said, referring to the cascade of cash being pulled from muni bond funds. “There is not enough money around right now to soak up all the bonds — especially if the bonds are not at the right level.”

“It’s sort of a stalemate,” he said. “Everyone knows the calendar can’t stay this light forever, and if fund flows stay negative, we may be in a situation where yields have to get higher for deals to get ­attention.”

Higher yields could be what it takes to address the problem of supply overhang in the market from competitive and negotiated deals priced last week.

Those unsold and leftover bonds are crowding inventories and making dealers less apt to buy additional new bonds, the underwriter said.

“The current supply is manageable, yet there is also a spectre of more supply in the horizon” that could present future challenges and increased weakness, he said.

This week’s subdued volume compares to a revised $2.39 billion sold last week, according to Thomson Reuters, which was up slightly from $1.93 billion that was originally expected, but still well below the $8 billion weekly average that has been typical in the fourth quarter.

The NTTA issue will include $606.5 million of tax-exempt special projects system revenue bonds and $422.3 million of taxable bond anticipation notes.

Citi is senior manager. Barclays Capital, Estrada Hinojosa & Co., Loop Capital Markets, Morgan Keegan & Co., Morgan Stanley, and Ramirez & Co. are co-managers.

The bonds are rated in the double-A category.

The New York TFA sale of future tax-secured, subordinate-lien revenue refunding bonds is expected to be priced by Wells Fargo Securities. It is structured as two series of bonds — $483 million of Series 2011E maturing from 2012 to 2025, and $17 million of Series 2011F bonds maturing from 2011 to 2025.

“That is a lot of bonds in the steep part of the curve,” the New York underwriter said, “but it’s also a part of the curve where professional retail participation is still a big driver.”

The bonds are rated Aa1 by Moody’s Investors Service and AAA by Standard & Poor’s and AAA Fitch Ratings. They are secured by tax revenues of the authority from personal income taxes and sales and compensating use taxes imposed by the city.

The TFA deal is part of an estimated $2.88 billion in negotiated deals, compared to a revised $1.65 billion last week. Competitively, only $400.9 million is ­estimated versus a revised $740.8 million last week.

Given the sparse supply situation lately, a $247.60 million revenue bond sale from Florida’s Sunshine State Governmental Financing Commission was thrust into the spotlight last week. Priced by JPMorgan, the deal’s $253.21 million portion of bonds to refund outstanding Miami-Dade County commercial paper notes had a 2027 final maturity with a 5.375% coupon priced to yield 5.52%.

The bonds were rated Aa3 by Moody’s and AA-plus by Standard & Poor’s. This week, the Denver Department of Aviation plans to issue $341 million of revenue refunding bonds on behalf of Denver International Airport — the region’s primary airport and a major hub for United Air Lines and Frontier Airlines.

Book-runner Citi is planning to offer the bonds to retail investors on Wednesday, and officially price the bonds for institutional investors on Thursday with a structure that consists of serial bonds maturing from 2012 to 2028.

The bonds are rated A1 by Moody’s, which revised its outlook to negative from stable last week ahead of the pricing. They are rated A-plus by Standard & Poor’s and Fitch.

Denver School District No. 1 expects to sell $400 million of taxable certificates of participation. The fixed-rate refunding will be priced by Goldman, Sachs & Co. on Tuesday.

The bonds, which are rated Aa3 by Moody’s and A-plus by Standard & Poor’s, will be structured as serial bonds maturing from 2017 to 2037.

The deal will include two term bonds, but the details about those maturities were not finalized at press time.

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