Two large note deals and a handful of long-term financings will come to market this week as part of an estimated $4.69 billion in new volume, according to Ipreo LLC and The Bond Buyer.

Last week, volume was $9.64 billion, according to Thomson Reuters, augmented by three large Northeast offerings of taxable Build America Bonds, which were sold Thursday and topped over $1.6 billion.

In what will be the last full week of market activity for the year, Pennsylvania is planning to issue $800 million of tax anticipation notes, while Suffolk County, N.Y., is also readying a $350 million Tan sale. Both of the note sales will take place in the competitive market tomorrow.

Slated to mature on June 30, 2010, the Pennsylvania notes are secured by pledged general revenues. They will be used to provide disbursements, payrolls, and other operating costs during the current fiscal year in order to cover cash shortfalls prior to the state receiving the bulk of its general fund revenues during the last four months of the current fiscal year from March through June.

The Pennsylvania notes are rated MIG-1 by Moody’s Investors Service and SP1-plus by Standard & Poor’s, and F1-plus by Fitch Ratings.

The Suffolk County notes, which mature on Aug. 12, 2010, are being sold in expectation of the county collecting $672 million in real property taxes and assessments for the fiscal 2010 operations. They are rated MIG-1 by Moody’s, SP1-plus by Standard & Poor’s, and F1-plus by Fitch.

Meanwhile, in the long-term market four other sizable deals also hailing from the Northeast region will share the spotlight this week, the largest of which is expected to be a $500 million sale of revenue bonds backed by payments in lieu of taxes from the Brooklyn Arena Local Development Corp., a subsidiary of the Empire State Development Corp.

Scheduled to be priced tomorrow by Goldman, Sachs & Co., the sale is expected to be rated Baa3 by Moody’s and BBB-minus by Standard & Poor’s and the proceeds will finance the Barclays Center Project. The structure of the deal was still being finalized at press time last Friday.

Nearby, Connecticut will come to market with $450 million of general obligation debt being issued as taxable BABs. Expected to be priced by Morgan Stanley tomorrow, the deal is structured with term maturities between 2020 and 2023, and in 2029, according to the preliminary official statement, and is rated Aa3 by Moody’s, AA by Standard & Poor’s, and AA by Fitch.

Elsewhere in the Northeast, Boston-based Partners Healthcare Systems Inc. is slated to issue $350 million of Series 2009 J revenue bonds in a negotiated deal planned for pricing tomorrow by JPMorgan.

The deal on behalf of the nonprofit integrated health care system is structured with a 2039 term bond and is rated Aa2 by Moody’s and AA by Standard & Poor’s and Fitch.

The hospital sector will also see the arrival of the University of Maryland Medical System’s $247.1 million sale of revenue bonds when JPMorgan prices the deal on Wednesday. The bonds are structured to mature from 2010 to 2039 and are expected to be rated A3 by Moody’s and A by the two other major rating agencies.

Switching to the Midwest, Illinois is planning to issue $375 million of sales tax revenue bonds under the Build Illinois bond initiative, the state’s first such issuance of the bonds since 2007.

The deal is expected to be priced by Chicago-based Cabrera Capital Markets LLC on Wednesday.

Rated A2 by Moody’s, AAA by Standard & Poor’s, and AA by Fitch, the bonds are secured by a pledge and first lien on 98.25% of the state’s share of sales tax revenues. For the fiscal year ending 2009, the state’s share of sales tax revenues amounted to over $7 billion, and annual debt service for all bonds outstanding under the Build Illinois program is approximately $300 million, according to the preliminary official statement.

Given the strong security of the bonds and the timing of the deal, underwriter Mitch Kapnick, managing director of the municipal bond department at Cabrera, believes there could be pent-up demand for the bonds.

“Even after this sale, this credit has 23 times coverage,” he said. “Given the December and January coupon payments, in addition to the dearth of conventional municipal bond deals, this deal will offer a lot of value for many.”

He expects to see both retail and institutional demand based on the structure, which is tentatively set to include serial and term bonds between 2011 and 2034.

“I think there’s great demand for retail inside of 10 years, and institutional demand is strong on the longer maturities,” Kapnick said. “On a negotiated deal, the ability to bifurcate maturities is a plus for retail because it enhances distribution, and provides a lower interest cost to the issuer.”

The deal comes on the heels of a $154.9 million Build Illinois sales tax revenue bond offering in the competitive market last week won by Bank of America Merrill Lynch with a true interest cost of 4.32%. Bank of America Merrill Lynch did not reoffer any of the maturities, which ranged from 2011 with a 5% coupon to 2034 with a 4 3/4% coupon.

The Detroit Public Schools will add to the region’s activity when it sells $251.7 million of taxable BABs tomorrow. JPMorgan is expected to price the offering with a final 2039 term bond, which is rated Aa3 by Moody’s, A-plus by Standard & Poor’s and AA-minus by Fitch.

Meantime, in the competitive market, one of the only sizable deal is a New Hampshire general obligation capital improvement offering, which will be priced tomorrow as three series totaling $200 million.

Two larger series total $75 million each and are structured to mature serially from 2017 to 2029, with one tax-exempt and the other comprised of taxable, direct-pay BABs. The remaining $50 million series is comprised of GO bonds set to mature serially from 2011 to 2017. All of the series are rated Aa2 by Moody’s, AA by Standard & Poor’s, and AA by Fitch.

This week’s slate follows in the shadow of over $57 billion of BABs sold to date as of last Friday, according to Thomson Reuters.

New York City priced $560.5 million of BABs ranging from 2017 with a 4.54% yield, or 2.96% after the 35% federal subsidy, to 2036 with a 5.985% yield, or a 3.89% after the subsidy.

In addition, the Massachusetts School Building Authority sold $450 million of BABs as part of a larger $600 million sale of dedicated sales tax bonds last Thursday. The non-callable BABs matured in 2039 and yielded 5.715%, or 3.71% after the 35% federal subsidy. They also yielded 125 basis points over the comparable Treasury yield at the time.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.