Market participants are divided when it comes to the $828.3 million Port Authority of New York and New Jersey consolidated bond deal, which is expected to price for institutions on Thursday.
"I'm a little uncertain about the deal," a New York trader said. "There hasn't been great reception for new issuances this week."
The Port Authority deal entered its retail order period Wednesday.
The $349.9 million non AMT tranche's yields ranged from 0.10% with a 3% coupon in 2016 to 3.33% with a 5% coupon in 2034.
"The deal seems compelling because of its different structures," a second New York trader said. "It has a big dollar price which is unattractive."
The $478.4 million alternative minimum tax portion of the deal's yields ranged from 0.10% with a 5% coupon in 2015 to 3.73% with a 5% coupon in 2034.
"The AMT component may offer more spread and it's priced where it should be price," the first trader based in New York said. "I'm not sure if on the institutional side that it will garner great reception."
All of the bonds are callable at par in 2024.
Other traders said despite controversy surrounding the Bridgegate scandal, in which there's an investigation into whether Port Authority appointees caused traffic jam on the George Washington Bridge as retribution against a political foe of Gov. Christie, the deal will be bought up by a diverse range of buyers.
Citigroup Global Markets is the lead underwriter. The deal is rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings.
The Port Authority last issued muni debt in June: $400 million of consolidated bonds, which were in high-demand even though they were not triple-A rated.
