A Texas issuer and a New York issuer will share the primary market spotlight this week, with a handful of deals from diverse sectors - including energy, tobacco, and airports - though the activity will arrive amid relatively light overall volume.
The market is expected to see $6.62 billion in total volume this week, compared with last week's revised $7.02 billion, according to Thomson Reuters.
The Dallas Area Rapid Transit Authority will issue $740 million of senior-lien revenue bonds when Merrill, Lynch & Co. prices the largest deal of the week on Thursday.
The bonds are structured to mature serially from 2009 to 2028, with terms in 2033, 2038, 2043, and 2048. Ratings are expected to be Aa3 from Moody's Investors Service, AAA from Standard & Poor's, and AA-minus from Fitch Ratings.
New York City's Transitional Finance Authority will bring $700 million of building aid revenue bonds to market on via a negotiated sale being senior-managed by Goldman, Sachs & Co. and priced officially for institutions on Wednesday.
In an effort to get the bonds exclusively sold to individual mom and pop investors, the TFA is conducting a three-day retail order period that began on Friday. New York retail investors will get first priority on bonds before national retail investors, according to the terms on the order period.
The bonds are expected to carry an A1 rating from Moody's, AA-minus from Standard & Poor's, and A-plus from Fitch, and are structured to mature serially from 2009 to 2029, with term bonds available in 2033 and 2038. On Friday, a preliminary pricing wire indicated that the final 2038 term bond was structured with a 4 3/4% coupon with a 4.80% yield at the same time that the natural triple-A general obligation yield curve in 2038 was yielding a 4.54%, according to Municipal Market Data.
In the Southwest, Colorado Energy is expected to issue $662 million of natural gas purchase revenue bonds in a Merrill-led deal that is slated for pricing tomorrow or Wednesday. The deal, which is expected to carry ratings of A1 from Moody's, A from Standard & Poor's, and A-plus from Fitch, is comprised of four term bonds maturing in 2018, 2023, 2028, and 2038.
Other market activity includes a $499 million Chicago, general obligation refunding deal that is scheduled to be priced on Wednesday by Depfa First Albany Securities LLC.
Structured with serial bonds maturing from 2010 to 2028, the issue also includes term bonds in 2033 and 2037 and is expected to carry ratings of Aa3 from Moody's and AA-minus from Standard & Poor's.
A $298.2 million tobacco settlement asset-backed refunding is also planned this week by the South Carolina Tobacco Settlement Revenue Management Authority. Led by Goldman, the deal is slated to be priced on Thursday and consist of one bullet maturity in 2018. The bonds are expected to carry ratings of Baa3 from Moody's, BBB from Standard & Poor's, and BBB-plus by Fitch.
Meanwhile, the Michigan Tobacco Settlement Finance Authority plans to enter the market tomorrow with $190 million of tobacco asset-backed bonds in a refunding deal that is aimed at generating $60 million to wipe out the state's current general fund deficit.
Citi is expected to price the deal, but the details about the structure were not yet finalized at press time.
Also in the Northeast, the Metropolitan Washington Airports Authority is planning to issue $250 million of revenue debt when Morgan Stanley prices its deal on Thursday. The structure of the deal, which is rated Aa3 by Moody's and AA by Fitch, was not available at press time.
The competitive market, meanwhile, is extremely light on sizable deals, except for a three-pronged Georgia GO sale totaling $522.4 million.
The deal is comprised of $465.8 million of GO debt maturing from 2009 to 2028, $53.6 million maturing from 2009 to 2013, and $2.9 million maturing from 2009 to 2018.
Georgia's GOs have natural triple-A ratings from all three rating agencies.