Revenue bonds from Arizona's Salt River Project top the calendar for the coming week, as issuers are set to bring $8.4 billion of long-term municipal debt to market, according to estimates from Ipreo and The Bond Buyer.
The planned bond volume compares with a revised $6.6 billion that priced the week of May 4, according to Thomson Reuters. The week of May 4 was originally estimated to produce about $9.2 billion of deals.
Yields on top shelf munis continued to rise during the week of May 4, topping out at about 15 basis points higher when the bonds were being priced, according to Municipal Market Data's triple-A scale. The rising yields were one reason the revised total volume for that week is lower than the original estimated amount.
There are $7 billion of negotiated deals set for week of May 11, while bonds scheduled for competitive sale total $1.4 billion. This compares with a revised $3.52 billion of negotiated deals and $3.08 billion of competitive offerings that sold the prior week.
The largest deal planned is the Salt River Project Agricultural Improvement and Power District's $833 million of electric system revenue bonds, scheduled to be priced by Goldman, Sachs on Wednesday. The issue is rated Aa1 by Moody's Investors Service and AA by Standard & Poor's.
Steve Hulet in the treasurer's office told The Bond Buyer the size of the deal is likely to be increased to anywhere from $900 million to $1 billion as "the SRP continues to consider how many refunding bonds to include. At this lower number, it is expected that the refunding would constitute roughly $600-$700 million," Hulet said.
Hulet said the district is expecting to include about $300 million of new money in the deal.
Siebert Brandford Shank is set to price the state of Connecticut's $500 million of Series 2015B general obligation, new money fixed rate bonds on Tuesday after a retail order period on Monday. The GOs are rated Aa3 by Moody's and AA by S&P and Fitch Ratings and AA by Kroll Bond Rating Agency.
"For the $500 million fixed rate bond issue, almost $300 million will be used for grants for the State's local school construction program and other educational facilities," said Sarah K. Sanders, assistant treasurer for debt management in the Connecticut state treasurer's office. "Economic development and urban action programs will receive $85 million, and $108 million will be used for grant in aid purposes (including $15 million for the state's Town Road Aid program). The remaining funds will be used for housing programs."
Sanders added that the timing of bond sales takes into account both market conditions and funding needs. "We are expecting a strong response to these offerings," she said. The State issues its general obligation bonds on a level principal amortization. For this particular sale, we have carved $25 million per year from the 2015 Series B bonds during the first ten years of principal amortization."
The Pennsylvania Turnpike Commission's $495.56 million of Series 2015A turnpike revenue bonds are set to be priced by Loop Capital Markets on Thursday. The issue is expected to consist of $379.92 million fix-rated Series A-1 bonds and $115.64 million of Series A-2 SIFMA floating-rate notes. The issue is rated A1 by Moody's and A-plus by S&P and Fitch.
Goldman is slated to price Austin, Texas' $404 million of electric utility system revenue refunding bonds on Tuesday. The issue is expected to consist of $323 million of tax-exempts and $81 million of taxable. The bonds are rated A1 by Moody's and AA-minus by S&P and Fitch.
"Proceeds will be used to refund outstanding bonds for savings and restore capacity in the commercial paper program by refunding CP into long-term debt," said Art Alfaro, treasurer for the city of Austin. "The entire issuance is a refunding and there is no new money. We are going with a negotiated sale to provide flexibility. Market volatility could cause changes in the size of the sale and we want to be able to change sale dates if necessary," Alfaro said.
Alfaro also noted that Austin electric utility hasn't been to market since Dec. 2012 .
The Las Vegas Valley Water District, Nev., is set to come to market with $388.12 million of Series 2015 A, B and C limited tax GO refunding bonds. JPMorgan is slated to price the bonds on Wednesday. The issue is rated Aa1 by Moody's and AA-plus by S&P.
Moody's Investors Service upgraded to Aa1 from Aa2 the Las Vegas Valley Water District's general obligation limited tax debt ahead of plans to price $430 million in water refunding bonds on May 13.
The rating upgrade is predicated upon the improving credit strength of the Southern Nevada Water Authority, whose net revenues secure a substantial portion of the authority's outstanding GOLT debt, according to the April 22 Moody's report.
"Finally, the rating takes into consideration the LVVWD's satisfactory and recently improved operating position supported by management's actions to increase rates and also reduce capital and operating expenses since the recent downturn," analysts said.
Frost Bank is slated to price the San Antonio Independent School District, Texas' $307.44 million of Series 2015 unlimited tax school building and refunding bonds on Tuesday. The bonds, which are backed by the Permanent School Fund guarantee program, are rated triple-A by Moody's and Fitch.
"With this sale we will achieve an estimated $38-$40 million in [present value] savings," said Lisa M. Pepi, director of cash and treasury management for the SAISD. "The savings [alone] are pretty exciting but this time we are continuing with the concept of involving the students in the sale. The board of trustees selected Frost Bank as the senior underwriter on the deal and as you may know their trading floor is located in their headquarters in downtown San Antonio. Our students will be able to observe and interact directly with the trading desk that is selling our bonds."
In the competitive arena, the Santa Clara Unified School District, Calif., is selling two separate offerings totaling $243.45 million on Thursday. The issues are comprised of $140.7 million of Series 2015 election of 2014 GO refunding bonds and $102.75 million of Series 2015 GO refunding bonds. Both sales are rated AA by S&P.
Richard Williamson and Keeley Webster contributed to this report.
