The highly watched Three World Trade Center Tower Project took orders through 12:30 p.m., EST, on Tuesday as investors waited to see what the market's appetite would be for the massive unrated deal.
A preliminary pricing wire from Goldman Sachs, the lead manager for the issuance, had the Class 1 $1.08 billion bonds priced at par to yield 5% in 2044 with an optional call feature in November 2024 at par, according to data collected by Ipreo. The $278.075 billion Class 2 bonds were priced at par as well to yield 5.30% in 2034 and 5.50% in 2040, according to data collected from Ipreo.
The bonds were issued through the New York Liberty Development Corporation.
Traders expected the pricing to come in wide, as only qualified investment buyers were eligible to purchase the bonds.
"It's going to look cheap because only the biggest firms are able to get a bite here," said a New York-based trader. "The majority of the municipal market can't participate in this deal."
Preliminary pricing put the deal at a wide discount to Municipal Market Data's 5% curve, with the Class 1 bonds initially priced at a 107 basis point spread to the BAA 5% curve, according to data collected by TM3.
The deal is unrated and considered "fairly speculative" by many traders, including the New York-based trader.
The MMD curve held largely steady on Tuesday morning, as traders waited for the New York deal to provide directionality. Yields on bonds maturing between 2015 and 2040 held steady as those maturing between 2041 and 2044 weakened up to one basis points as of 12:14 p.m., EST, according to data provided by TM3.
