The bulk of the week's primary volume will be priced on Tuesday, though some of the large issuances are actually taxable, pushing away some traditional municipal buyers. Taxable issuance gives borrowers flexibility with the use of proceeds, as the funds are not restricted by strict 501(c)3 spending laws. However, the rates are usually higher, as the buyer base is limited, not garnering interest from all traditional municipal bond purchasers.
Primary
- JP Morgan Securities will price a $750 million taxable health financing deal on behalf of Dignity Health, formerly known as Catholic Healthcare West. The bonds are rated A3 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings. The maturity structure wasn't available at press time. The deal is part of $1.4 billion of debt in private placements and open market deals this month from the provider, which has hospitals in California, Arizona, and Nevada.
- The Port Authority of New York and New Jersey will also sell taxable debt in the markets on Tuesday, with a $250 million taxable bond deal slated for institutional sale. The bonds are structured to mature in 2034 and will be priced on Tuesday, following indications of interest on Monday by senior book-runner Wells Fargo Securities.
- On the tax-exempt side, a $525 million offering of school facilities construction bonds from the New Jersey Economic Development Authority is slated for institutional pricing on Tuesday by JPMorgan, following a retail order period on Monday. Rated A2 by Moody's and A-minus by the two other major rating agencies, the deal is structured as serial and terms.
- The District of Columbia is also planning to tap the market with a $523.43 million issue of general obligation bonds for both new money and refunding purposes. The negotiated deal is slated for pricing by Loop Capital Markets. Structured to mature serially from 2015 to 2038, the D.C. GOs are rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.
Secondary
- In anticipation of the Port Authority deal, the New York Metropolitan Transportation Authority was a top trader on Tuesday morning, with over $24 million in trading recorded on its 5s of 2043, according to data provided by Municipal Securities Rulemaking Board's disclosure website EMMA. Yields softened in round lot trading, weakening five basis points to 3.54% from 3.59% the day prior.
- The commonwealth of Massachusetts was also a top traded issuer, netting $13.08 million in secondary trades on Tuesday morning. Yields on the 5s of 2026 weakened one basis point to 2.23% from 2.24% in round lot trading, according to EMMA.
Scales
The Municipal Market Data's triple-A 5% curve held mostly steady on Tuesday morning, according to data provided by TM3. Yields on bonds maturing between 2015 and 2021 were unchanged and those maturing between 2022 and 2044 strengthened up to one basis point, according to TM3.
