As the spring reinvestment season gets underway, investors expecting June 1 coupon and maturity payments will have no shortage of supply this week.
Large health care deals in California and Pennsylvania, as well as a trio of sizable general obligation sales in the Northeast, are expected to be priced as part of an estimated $7.66 billion of new volume, according to Ipreo LLC and The Bond Buyer.
Last week, the market saw a revised $5.08 billion, according to Thomson Reuters, with the largest deal being a $500 million sale of taxable Build America Bonds by the Illinois State Toll Highway Authority. A $100 million portion maturing in 2024 yielding 5.29% priced at par and 210 basis points over comparable Treasuries. A $400 million portion maturing in 2034 priced at par to yield 6.18%, or 200 basis points over comparable Treasuries.
This week, a $750 million sale of health care revenue bonds from the California State Communities Development Authority on behalf of Oakland-based health care group Kaiser Permanente will be the largest deal to enter the market.
Being priced on Thursday by Citi, the deal will be structured as serial and term bonds, but the exact structure was still being finalized as of press time Friday. The bonds are rated A-plus by Standard & Poor's and Fitch Ratings.
The Allegheny County, Pa., Hospital Development Authority is planning to issue $400 million of hospital revenue bonds on behalf of the University of Pittsburgh Medical Center.
RBC Capital Markets expects to price the offering on Wednesday with a structure of serial bonds maturing from 2010 to 2024, as well as term bonds maturing in 2029, 2034, and 2039. The bonds are rated Aa3 by Moody's Investors Service, A-plus by Standard & Poor's, and AA-minus by Fitch Ratings.
Pennsylvania itself is planning to sell $616.8 million of GO debt in the competitive market tomorrow - the largest of a trio of GO sales in the Northeast this week.
The two-pronged deal consists of $464 million of new-money GO bonds maturing from 2010 to 2029, and $152.8 million of GO refunding debt maturing from 2009 to 2014. The state's full faith and credit GO debt is rated Aa2 by Moody's and AA by both Standard & Poor's and Fitch.
Massachusetts, meanwhile, will have a highly visible presence in the primary market this week with two separate offerings - one in the negotiated market and one in the competitive market.
A $300 million sale of the state's GO bonds is slated for pricing on Wednesday by Fidelity Capital Markets, following a two-day retail order period today and tomorrow. Series 2009 B consists of serial bonds maturing from 2010 to 2029, and term bonds in 2034 and 2038, and is rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.
In addition, Massachusetts will sell $321.4 million of GO debt competitively - $250 million of which is structured as Series C tax-exempt bonds maturing from 2010 to 2038, and $71.4 million as Series D taxable bonds maturing from 2010 to 2016.
New York City will round out the region's activity with its $600 million sale of GO bonds, which are being priced by Merrill Lynch & Co. on Wednesday following a two-day retail order period today and tomorrow. The sale will consist of new-money debt, the proceeds of which will finance the city's ongoing capital improvement program. Even though there is still no structure finalized for the deal, it is likely to be a traditional serial structure maturing out to 25 years, according the New York City comptroller's office.
Citi, JPMorgan, and Morgan Stanley are co-senior managers on the deal, and the bonds are rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.
In addition to its tax-exempt sale, the city also plans to sell $190 million of taxable GO debt in the competitive market on Wednesday.
In one of the other sizable deals of the week, the Virginia Public Building Authority is planning to issue $318.1 million of public facility revenue bonds in a negotiated deal being priced by BB&T Capital Markets tomorrow, after a retail order period today.
Rated Aa1 by Moody's and AA-plus by Standard & Poor's and Fitch, the deal is structured to mature from 2010 to 2029. Series 2009B consists of $265 million of tax-exempt public facility revenue bonds, while Series 2009C consists of $10 million of taxable public facility revenue bonds. Series 2009D, meanwhile, is structured as $43.1 million of tax-exempt public facility revenue refunding bonds.