There will be a small array of new issues in the primary market this week - including a pair of sizable New York deals and a pair of taxable Build America Bond sales.
An estimated $3.72 billion is expected to be priced during a trading week shortened by the Memorial Day holiday, according to Ipreo LLC and The Bond Buyer.
By comparison, last week the municipal market welcomed a revised $5.80 billion of competitive and negotiated volume, according to Thomson Reuters.
A $425.6 million New York State Thruway Authority sale of state personal income tax revenue bonds for transportation purposes will be the Northeast region's largest deal when it is priced for institutions tomorrow, following a retail order period today.
Scheduled for pricing by RBC Capital Markets, the deal is structured to mature from 2010 to 2029 and is rated AAA by Standard & Poor's and AA-minus by Fitch Ratings. However, RBC said Friday that it was considering insurance for the deal.
The New York State Dormitory Authority, meanwhile, will sell $355.5 million for the state's school district revenue bond financing program in a four-pronged negotiated issue, which is being priced by RBC on Thursday, following a retail order period tomorrow.
Series B consists of $180 million of debt maturing from 2010 to 2037, Series C totals $157 million of bonds maturing from 2010 to 2039, and Series D consists of $15.2 million of serial bonds maturing from 2010 to 2024. Series E is only $2.34 million of debt maturing from 2010 to 2025.
Series B and E are rated A2 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch. Series C is rated A1 by Moody's, A-plus by Standard & Poor's and A by Fitch, while Series D is rated Aa3 by Moody's and A-plus by both Standard & Poor's and Fitch.
New York City successfully sold $800 million of general obligation bonds last Wednesday in a deal priced by Merrill Lynch & Co. The final 2036 maturity in the $600 million new-money series carried a 5% coupon that was priced with a 4.97% yield - 65 basis points cheaper than the triple-A GO scale in 2036 published by Municipal Market Data.
The 2019 final maturity in the $200 million refunding portion of the deal carried a split coupon of 4% and 5%, with both priced to yield 3.76% - 98 basis points cheaper than the triple-A GO scale in 2019 at the time of the pricing. The city's GO credit is rated Aa3 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch.
Back in this week's market, a $350 million sale of BABs is being planned by the New Jersey Transportation Trust Fund Authority when Merrill prices the negotiated deal on Thursday.
The deal is rated A1 by Moody's, AA-minus by Standard & Poor's and A-plus by Fitch. The structure was still being worked on at press time.
The state of Louisiana will also bring BABs to market this week when it sells $121.2 million of gasoline and fuel tax-backed second-lien revenue bonds in a negotiated deal being priced by Merrill on Wednesday.
An underwriter at Merrill said on Friday that the deal will consist of a five-year put bond with a floating-rate structure, and the bonds will be rated Aa3 by Moody's and AA by Standard & Poor's.
The sale will make effective the 25% of the swap agreement held by Merrill Lynch under an agreement reached between the state and swap providers in December 2006.
In the Midwest, the Illinois Finance Authority is planning to issue $250 million of health care revenue bonds in a Goldman, Sachs & Co.-led deal tentatively being priced on Wednesday.
The bonds, which are rated BBB by Standard & Poor's and BBB-plus by Fitch, will be sold on behalf of the Silver Cross Hospitals and Medical Centers in Joliet, Ill. The structure of the deal was still being hammered out at press time, according to Goldman.