The largest deal this week, $227 million of Connecticut general obligation bonds, came to the competitive market Thursday, as bond traders anticipated some relief from thin market issuance.
Originally slated as the week's biggest deal, $270 million of California Successor Agency to the Inland Valley Development Agency bonds were delayed due to legal wrangling.
Potential issuance in the week had been estimated at $2.87 billion, according to Ipreo and The Bond Buyer data, but will likely be significantly lower than expected as another of the week's biggest deals, $193 million of New Jersey Educational Facilities Authority bonds for Montclair State University, was also delayed.
Sources said the California Successor Agency bonds were delayed due to litigation by the San Bernardino County auditor surrounding the agency's funds. It was unclear at press time why the New Jersey bonds were delayed.
The Successor Agency is a joint powers authority composed of four local government entities in the state of California: the county of San Bernardino, the cities of San Bernardino, Colton and Loma Linda. The original Inland Valley Development Agency was shut down on February 1, 2012, when the California Supreme Court disbanded the state's 400 redevelopment agencies.
"These development agencies have a lot of legal issues," one California-based trader said in an interview. "It's the nature of entities that used to operate in symmetry with each other and then one day it stopped. All of a sudden informal becomes formal and money gets trapped somewhere."
Wells Fargo won the bid for $225 million of Delaware GOs. Yields on the bond ranged from 0.14% with a 5% coupon in 2015 to 3.44% with a 4% coupon in 2032. The bonds are callable at par in 2022.
The AAA-rated bonds will be used to pay for capital facilities and to finance capital projects as the state looks to reduce its indebtedness, according to the preliminary official statement.
With reporting from Hillary Flynn and Maria Bonelllo
