A planned $1.2 billion New York State Dormitory Authority sales tax revenue offering will headline the primary market activity in the coming week and help boost new volume to over $9 billion.
The New York offering is part of an estimated $9.16 billion in primary issuance for the week of July 20, according to Ipreo LLC and The Bond Buyer.
That compares with a revised $7.80 billion that sold in the past week, as reported by Thomson Reuters.
There are $7.64 billion of negotiated deals slated for the week of July 20, compared to a revised $6.09 billion in the past week. Bonds slated for competitive sale in the coming week are estimated at $1.52 billion, versus a revised $1.70 billion in the past week.
The large calendar is something the market is craving at this time of the year, municipal sources said.
"The need for paper is out there," said a New York trader in an interview on Friday afternoon. He described the market as quiet, with few bid wanted lists, light trading overall, and volume down as much as 30% from the prior session.
"The New York Dorm deal will add a little bit of excitement, which we could use," he said. "There have been a lot of ground balls and this is a home run," he said of the size of the deal, which is being priced for retail on July 21 and institutions on July 22 by Morgan Stanley and is rated triple-A by Standard & Poor's and AA-plus by Fitch Ratings. The bonds are tentatively structured as serials, maturing from 2016 to 2025.
He said he expects the deal to get placed without much delay.
"There will be some of it on the Street, but that will be temporary, and ultimately it will get placed and not sit around stale," he said.
Michael Pietronico, chief executive officer at Miller Tabak Asset Management, said next week's supply should be well received because the technical conditions of the market remain favorable.
"Our expectation is that shorter maturity bonds will outperform as secondary market float in this range has begun to dry up due to strong seasonal reinvestment demand," he said on Friday.
The dormitory authority comes to market on the heels of being named by Thomson Reuters as the top ranked issuer in the Northeast region year to date, with 24 issues totaling $4.66 billion and an 8.8% market share.
The New York market will also see a $500 million sale of transportation revenue refunding bonds issued by the Metropolitan Transportation Authority.
Siebert Brandford Shank & Co. will conduct a retail order period on July 22, followed by institutional pricing on July 23 for the three pronged structure that includes $400 million of subseries 2015 C-1 fixed-rate bonds, $50 million of subseries 2015C-2 mandatory tender bonds, and $50 million of subseries 2015C-3 LIBOR floating rate tender notes.
The bonds are rated A1 by Moody's, AA-minus by Standard & Poor's, and A by Fitch.
Sharing the spotlight will be the city of Honolulu, which plans to issue new-money and refunding revenue debt totaling $689.11 million in the negotiated market.
Bank of America Merrill Lynch will price the Hawaii sale for institutions on July 22, after a one-day retail order period on July 21.
The financing is structured with five series, consisting of senior lien bonds in a $176 million 2015A new-money tax-exempt revenue series maturing from 2017 to 2045; a $273.9 million 2015B tax-exempt refunding with maturities from 2017 to 2036; and a $99.9 million 2015C series taxable refunding bonds maturing from 2016 to 2045. The junior lien bonds include a $114.5 million 2015A tax-exempt refunding bond series, and a $24.5 million Series 2015B taxable refunding bond series.
The proceeds will finance improvements to wastewater facilities, including $5.9 million in capital improvements through fiscal year 2030. The wastewater revenue senior bonds are rated Aa2 by Moody's Investors Service and AA by Fitch Ratings, while the junior bonds are rated Aa3 and AA-minus, respectively.
The Port of Seattle will sell a total of $592.58 million of revenue debt in a three-pronged negotiated offering slated to be priced by Morgan Stanley & Co. on July 21.
The bonds carry an A1 rating from Moody's Investors Service, and A-plus from both Fitch ratings and Standard & Poor's, and proceeds will refund outstanding debt and finance runway extensions and additional gates at the city's airport.
The sale is comprised of $72.75 million of revenue debt not subject to the alternative minimum tax; $231 million of revenue bonds subject to AMT, and $288.83 million of non-AMT revenue refunding bonds.
The intermediate-lien bonds are supported by the port's revenues after the payment of operating expenses and payments required by first-lien bonds.
Meanwhile, a $300 million sale of revenue bonds will be issued by the Harris County, Tex., Cultural Educational Facilities Authority on behalf of the Houston Methodist Hospital.
Lead book runner Bank of America Merrill will price the offering on Wednesday, and the bonds are rated AA by Standard & Poor's.
