As new-issue volume begins to build a little more momentum, a two-pronged negotiated deal from the Arizona Transportation Board totaling $706.2 million will headline the activity this week, which includes an estimated $5.62 billion in primary issuance, according to Ipreo LLC and The Bond Buyer.
The projected volume compares to the revised $3.04 billion that arrived this week, according to Thomson Reuters.
This week’s calendar is noticeably more brisk than last week’s when fewer sizable deals rang in the first week of the New Year amid steady gains that saw the 30-year benchmark triple-A general obligation yield decline from a 2.87% last Monday to a 2.80% as of last Thursday, according to Municipal Market Data.
Traders were surprised by the market’s strength despite the backdrop of fairly light supply, the expectation of higher taxes and the uncertainty surrounding the cap on tax-exemption.
Jefferies & Co. priced one of the only large deals: a $903.7 million New York Metropolitan Transportation Authority Triborough Bridge and Tunnel Authority refunding issue last Thursday.
The sale included $656 million of subordinate revenue refunding bonds, rated A1 by Moody’s Investors Service, A-plus by Standard & Poor’s and Fitch Ratings, and AA-minus by the Kroll Bond Rating Agency.
Yields ranged from 0.40% with a 2% coupon in 2014 to 3.20% with a 3.125% coupon in 2032. The bonds are callable at par in 2023.
This week, the Arizona subordinated highway revenue deal will lead off negotiated activity when it is priced by JPMorgan on Wednesday.
The $593.6 million Series 2013A consists of tax-exempt revenue bonds maturing from 2021 to 2038, while the $112.6 million Series 2013B consists of taxable revenue bonds maturing from 2014 to 2021, both of which are rated Aa2 by Moody’s and AA-plus by S&P.
In the Northeast, the MTA is expected to return to market with $500 million of transportation revenue debt for retail investors on Tuesday, followed by an institutional pricing on Wednesday by book-running senior manager Citi.
M.R. Beal & Co. is a special co-senior manager, according to an authority spokesman.
The deal consists of serial bonds maturing from 2014 to 2033, with term bonds expected in 2038 and 2043. The bonds are rated single-A by all three major rating agencies.
A $411.1 million sale of senior revenue bonds from the San Diego County Regional Airport Authority will add to Far West activity when Jefferies prices the deal on Thursday, following a retail order period on Wednesday.
The bonds are rated A1 by Moody’s and A-plus by Standard & Poor’s and Fitch, and the structure includes $298.49 million of bonds subject to the alternative minimum tax maturing from 2015 to 2033, with terms in 2038 and 2043 and $112.68 million of non-AMT bonds maturing from 2015 to 2030 with a term in 2043.
Pennsylvania’s Commonwealth Finance Authority is planning to sell three series of revenue bonds totaling $330 million on Tuesday with RBC Capital Markets as book-runner.
The $207 million Series 2013 B consists of tax-exempt bonds maturing from 2014 to 2032, with terms in 2037 and 2042; the $75 million taxable Series 2013 A-1 matures from 2014 to 2027, and the $48 million tax-exempt Series 2013 A-2 matures from 2027 to 2033.
The Pennsylvania bonds are rated A1 by Moody’s, AA-minus by Standard & Poor’s, and AA by Fitch.
In other activity, Ohio State University will issue $329.44 million of special-purpose general receipts bonds in a negotiated deal being priced by Barclays Capital on Wednesday.
The bonds, which are rated Aa2 by Moody’s and AA-minus by Standard & Poor’s, are structured to mature serially from 2023 to 2033 with term bonds expected in 2038 and 2043.
The Southeast market will see a $343.2 million tax-exempt and taxable senior revenue refunding from the Louisiana Stadium & Exposition District priced by Bank of America Merrill Lynch for retail investors on Monday and institutions on Tuesday.
The deal will consist of tax-exempt securities totaling $297 million and maturing from 2017 to 2036, and $46.2 million of taxable securities maturing from 2013 to 2017.