Issuers in New York and Massachusetts are headed to the primary market with large financings this week earmarked for transportation, environmental, and education purposes as part of a $4.11 billion in expected new volume, according to Ipreo LLC and The Bond Buyer.
As February gets underway, issuers hope the market begins stronger than where January ended last week when yields on the long end of the market rose by as much as three to five basis points on average. This was against the background of an announcement last Wednesday by the Federal Open Market Committee that it would leave the federal funds rate target unchanged at its 0% to 0.25% range.
The generic, triple-A general obligation scale in 2040 ended at 4.23% Thursday, two basis points higher than Wednesday, when it rose to 4.21% after closing at 4.15% last Tuesday, according to Municipal Market Data.
In the midst of the weakness, the market welcomed a revised $6.47 billion in new volume last week, according to Thomson Reuters. They included a $1.84 billion sales tax issue from the Puerto Rico Sales Tax Financing Corp. that Citi priced on Wednesday with a 2042 current interest term bond priced to yield 5.65% and a zero-coupon noncallable bond that matures in 2033 and was priced to yield 6.25%.
The bonds are rated A2 by Moody’s Investors Service, A-plus by Standard & Poor’s, and A by Fitch Ratings.
In this week’s market, New York’s Metropolitan Transportation Authority and the New York State Environmental Facilities Corp. will lead activity in the Northeast. The MTA is planning to sell $650 million of transportation revenue bonds, including $550 million of taxable, direct-pay Build America Bonds and $100 million of traditional tax-exempt bonds.
Co-senior managers Barclays Capital and Siebert Brandford Shank & Co. will hold a retail order period and take indications of interest for the BABs tomorrow before pricing the deal Wednesday.
A $327.1 million offering of clean water and drinking water state revolving fund revenue bonds is on tap from the EFC and also includes BABs.
Siebert is planning to price the deal tomorrow with $185.9 million of BABs and $141.1 million of traditional tax-exempts. Both portions are rated Aa1 by Moody’s and AA-plus by Standard & Poor’s and Fitch.
The second-resolution subordinated revenue bonds will finance New York City Municipal Water Finance Authority projects, according to the preliminary official statement.
Elsewhere in the region, the Massachusetts Education Finance Authority is preparing $358.6 million of education loan revenue bonds for pricing by Morgan Stanley on Wednesday following a retail order period tomorrow.
The deal includes a $316 million series of tax-exempt education revenue bonds, a series of education bonds subject to the alternative minimum tax, and a series of taxable education bonds. The maturity structure and ratings were not available at press time Friday.
In the Midwest, the Indianapolis Local Public Improvement Bond Bank is planning to sell $200 million of GOs for the Marion County Health and Hospital Corp.
Citi on Wednesday will price the deal with traditional tax-exempt serials from 2013 to 2022 and taxable direct-pay BABs maturing in 2030 and 2040. The bonds are rated Aa2 by Moody’s, and AA-plus by Fitch and Standard & Poor’s.
Proceeds will finance the renovation of the Indianapolis-based Wishard Memorial Hospital, which is operated by the corporation and was used to treat soldiers during the Civil War.