A handful of reasonably sized deals will head to market this week while many municipal participants continue to be on hiatus due to religious and spring break holidays.
An estimated $4.13 billion of new long-term volume is expected to be priced in the competitive and negotiated markets, according to Ipreo LLC and The Bond Buyer. That compares to last week when a revised $3.48 billion actually came to market, according to Thomson Reuters.
The largest deal on tap is a $420 million traditional taxable sale from the Irvine Ranch, Calif., Water District. Scheduled to be priced Thursday by Bank of America Merrill Lynch, the bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s and are tentatively structured as serial bonds maturing from 2011 to 2014.
The San Diego Public Facilities Finance Authority will add to the state’s essential service activity with its $167 million sale of water and sewer system revenue bonds tomorrow. Planned for pricing by Citi, the deal is structured to mature from 2024 to 2029 and is rated A2 by Moody’s, A-plus by Standard & Poor’s, and AA-minus by Fitch Ratings.
Elsewhere in the state, the California Educational Facilities Authority will come to market with $235.5 million of revenue bonds on behalf of Stanford University to fund capital projects. Rated triple-A by all three agencies, the deal is planned for pricing by Morgan Stanley tomorrow. However, the maturity structure was not available at press time.
In the Northeast, Philadelphia will issue $391.3 million of water and wastewater revenue refunding bonds on Thursday in a Morgan Stanley-led deal. The bonds are expected to be rated A3 by Moody’s, A by Standard & Poor’s, and A-minus by Fitch.
Proceeds will refund outstanding Series 2003 variable-rate bonds and pay $53.9 million to terminate a fixed payer swap to counterparty Citi. The bonds are secured by net operating revenues of the water and wastewater system, but the maturity structure was not available at press time.
A $350 million revenue sale is also being planned by the Troy, N.Y., Capital Resource Corp. on behalf of Rensselaer Polytechnic Institute. Lead manager Morgan Stanley is expected to be price the offering on Thursday with ratings of A3 from Moody’s and A from Standard & Poor’s, but the structure was not available late last week.
New Hampshire will issue $175.8 million of general obligation refunding bonds in a deal being led by Morgan Keegan & Co. The deal is rated Aa2 by Moody’s and AA by Standard & Poor’s and Fitch. It is structured to mature serially from 2010 to 2030. Proceeds will be used to provide current and advance refunding of various series of GOs from 2000, 2001, 2003, 2005, 2006, and 2008.
In the competitive market, Illinois will issue $356 million of GOs in a two-pronged deal expected tomorrow. It consists of $300 million of taxable Build America Bonds and $56 million of traditional taxable securities, both of which mature from 2011 to 2035. They are rated A2 by Moody’s, A-plus by Standard & Poor’s, and A-minus by Fitch.
The deal comes as the state faces a $13 billion budget deficit and liquidity crisis that caused a recent downgrade from Fitch last Monday. All three agencies have a negative outlook on the state’s GOs.Proceeds from the sale will be used to finance capital projects under a program to resuscitate the state’s ailing economy through job creation over the next six years.
Volume has showed a marked decrease in the last two weeks compared to the supply bonanza that arrived the week of Mar. 22, when a revised $11.86 billion of new issuance thundered into the market, led by a $3.4 billion sale of taxable California GOs that included $2.5 billion of BABs, according to Thomson.