Airport deals will dominate the shortened holiday week, as volume drops to a scheduled $4.1 billion from $6.24 billion in the past week.
A $784 million Chicago Midway Airport bond sale and a $542 million Metropolitan Washington Airport Authority issuance are likely to attract buyers, according to Jim Colby, chief municipal strategist at Van Eck Global.
"There is no doubt they will have high demand — it goes to the issue of diversification," he said in an interview. "Investors like to see different types of issues and deals come to market rather than just housing or general obligation deals. Airline, toll road or other types of debt issuance that come into the market attract demand from portfolios looking for a new or different name."
With the airport sector recovering, airport deals have injected yield into a market famished for it.
On Wednesday, $190.145 million of Dallas and Fort Worth, Texas, airport joint revenue improvement bonds came to market with yields ranging from 2.44% with a 5% coupon in 2021 to 4.5% at par in 2024.
The Metropolitan Washington Airport Authority issued $429.6 million senior revenue bonds on May 15 with yields ranging from 4.40% with a 5% coupon in 2053.
Yields on bonds that account for 92.56% of the metro Washington Airport Authority's trading volume have fallen by nine basis points since May 15 to 4.29%, according to Bloomberg data.
The Chicago Midway Airport revenue refunding deal, the biggest scheduled sale for the week, is set for Thursday.
The deal includes a taxable series with maturities from 2021 to 2034 and 2041. A tax-exempt portion has maturities between 2019 and 2037.
Barclays Capital is the managing underwriter. The bonds are rated A3 by
Moody's Investors Service and A-minus by both Standard & Poor's and Fitch Ratings.
The Washington Metropolitan Airport Authority's issuance, the third largest of the week's offerings, is also expected on Thursday.
The deal includes taxable airport system revenue and refunding bonds, which will be brought to market by Bank of America Merrill Lynch. Moody's rates the bonds A1, while S&P and Fitch have them at AA-minus.
The second largest negotiated issuance on the schedule is the Massachusetts Water Pollution Abatement Trust State Revolving Fund's $561.24 million refunding that Bank of America Merrill Lynch is expected to price on Thursday.
The bonds' retail order period is scheduled for Wednesday. They are rated Aaa by Moody's and AAA by S&P and Fitch.
