After accommodating some heavy June volume, the municipal market could see its first dose of summer doldrums this week as a pair of airport revenue offerings are priced amid a relatively light calendar, estimated at $1.97 billion, of primary market offerings ahead of the July 4 holiday, according to Ipreo LLC and The Bond Buyer.
The volume pales in comparison to the revised $3.43 billion that entered the market last week and $6.91 billion the prior week, according to Thomson Reuters.
Despite the lack of supply that usually accompanies the arrival of summer, volume has been robust in recent weeks as issuers rush to sell a significant amount of taxable Build America Bonds in addition to their tax-exempt deals. Since the federal BAB program was enacted by the stimulus law in February, municipal issuers have issued more than $12.5 billion of BAB debt, according to Thomson.
Orange County, Calif., and St. Louis, Mo., will each bring two airport deals to market this week. However, combined, they amount to significantly less than last week's single largest deal - an $808.6 million Dormitory Authority of the State of New York sale of personal income tax revenue bonds.
The Dormitory Authority deal, which is rated AAA by Standard & Poor's and AA-minus by Fitch Ratings, included a final 2039 maturity that was priced to yield 5.19% with a 5% coupon.
The $235.7 million California airport deal, being sold on behalf of John Wayne Airport to finance the addition of terminal space, six new gates, and parking facilities, is expected to be priced tomorrow by Citi after a one-day retail order period today.
The fixed-rate, senior-lien bonds are structured to mature from 2010 to 2019 with term bonds in 2024, 2029, and 2039, and are rated Aa3 by Moody's Investors Service, and AA-minus by Fitch. The deal will also sport a new upgrade from Standard & Poor's to AA-minus from A-plus, which was announced two weeks ago in advance of the sale.
Besides Orange County's airport sale, a sizable tax and revenue anticipation note deal will also arrive in the California market this week.
Santa Clara County will issue Trans totaling $177 million in a competitive offering slated to arrive on Thursday.
In the Midwest, the $150 million St. Louis airport offering is expected to be priced tomorrow in a Goldman, Sachs & Co.-led deal on behalf of the Lambert-St. Louis International Airport.
That deal, which is rated Baa1 by Moody's, A-minus by Standard & Poor's, and BBB by Fitch, will include new-money and refunding bonds and is structured to mature serially from 2010 to 2019 with term bonds tentatively scheduled in 2029, 2034, and 2039.
Two Florida deals are also earmarked for sale this week, the larger of which is a $218.6 million Miami-Dade professional sports facilities franchise tax and refunding bond issue on behalf of the Florida Marlins baseball stadium. The deal is expected to be priced tomorrow by Merrill Lynch & Co. after being postponed two weeks ago due to a temporary injunction to stop the issuance of $90 million of refunding bonds that are part of the deal, as well as a last-minute technical issue required a change in bond documents.
The stadium bonds, which will be offered to retail investors today ahead of the official pricing, are expected to carry ratings of Aa2 from Moody's, AAA from Standard & Poor's, and AA from Fitch.
The structure is expected to include one taxable refunding series and three other series, including tax-exempt new-money and refunding bonds and taxable new-money bonds, and will include serial and term bonds with various amounts of current interest, capital appreciation, and convertible capital appreciation bonds maturing from 2010 to 2049.
Meanwhile, Miami-Dade County will also come to the Florida market tomorrow when JPMorgan prices $100 million of special obligation debt structured to mature from 2010 to 2049 and rated A3 by Moody's, A-plus by Standard & Poor's, and A by Fitch.
One of the only other relatively sizable deals of the week arrives in the Texas higher education market, where the San Jacinto Community College District will issue $150 million of limited tax general obligation debt. Coastal Securities Inc. will price the new-money deal tomorrow with a structure that includes serial bonds maturing from 2011 to 2039, and ratings of Aa3 from Moody's and AA from Standard & Poor's.
