Municipal issuance is expected to surge in the post-holiday primary market, led by a $1.2 billion revenue sale from the New York State Tobacco Settlement Authority.
The deal is part of an estimated $6.54 billion in long-term bonds headed to market this week as reported by Ipreo LLC and The Bond Buyer as the primary calendar goes from scarce to plentiful. Last week, volume dropped to $652.2 million as issuers trimmed offerings ahead of the Thanksgiving holiday, according to Thomson Reuters.
The tobacco deal will be offered to retail investors on Tuesday ahead of the official pricing for institutions by Citi on Wednesday. The preliminary structure consists of serial bonds maturing from 2018 to 2022, which are rated AA-minus by Standard & Poor’s and Fitch Ratings.
The sizable tobacco deal and other large negotiated and competitive financings slated for this week and next should pique investors’ attention, according to one New York underwriter.
“Given the timing, these are probably the last two weeks before people start thinking about wrapping up for the holidays,” he said.
Following the tobacco sale, a $488.94 million District of Columbia general obligation sale is slated for pricing by Bank of America Merrill, Lynch & Co. on Thursday. Tentatively structured as serial bonds maturing from 2015 to 2030, the bonds are rated Aa2 by Moody’s Investors Service and AA-minus by Standard & Poor’s and Fitch.
The Delaware River Port Authority will add to the activity with its $486.29 million sale of revenue debt planned for pricing by Citi on Thursday with a tentativ structure of serial bonds maturing from 2027 to 2034 and term bonds in 2037 and 2040. The bonds are rated A3 by Moody’s and A by Standard & Poor’s.
A $370 million taxable revenue sale from the New York State Dormitory Authority is scheduled for pricing by Siebert Brandford Shank & Co. on Wednesday with structure of serials from 2015 to 2027, and term in 2034. The bonds will be rated triple-A by all three major rating agencies.
Meanwhile, activity in the competitive market will kick off with a $452.26 million revenue sale from the Los Angeles County Metropolitan Transportation Authority on Wednesday.
The larger series consists of $318.18 million of sales tax revenue bonds maturing serially from 2014 to 2038, while a $134.08 million series of sales tax revenue refunding debt will mature serially from 2014 to 2034.
Elsewhere in the competitive market, two other sizable deals will include a $90.9 million Nassau County, N.Y., sale of general improvement bonds maturing from 2015 to 2043 and slated for Thursday, as well as a two-pronged New Hampshire sale of capital improvement bonds. That deal consists of $58.67 million in tax-exempt bonds structured from 2015 to 2033 and $19.14 million of taxable debt matured from 2014 to 2023.
