With the future of advance refundings and private activity bonds up in the air, the New York Metropolitan Transportation Authority has decided to take action and advance refund debt while they still can. Given the uncertainty, the MTA’s move could be repeated by many other issuers in position to do so, elevating issuance for the rest of the year.
VOICEOVER: With the House Republicans passing their tax bill late last week, the future of private activity bonds and advance refundings are very much up in the air. Although the Senate Majority Whip told The Bond Buyer he will fight to keep PABs in the final tax reform bill when the Senate and House Republicans negotiate their differences next month, issuers don’t want to hold their breath.
The New York MTA has decided to take action and jump into market with a $2 billion transportation revenue advance refunding green bond deal. A spokesperson with the MTA said that the current low rates and strong investor appetite for bonds, plus the anticipated tax reform in Washington, have prompted the authority to prepare the upcoming offering set to price over a two-day period starting today.
This action by the MTA could be a foreshadow of what is to come over the next few weeks, as whispers of a potentially mammoth week in early December could happen, due to issuers hitting the market with advance refunding and PABs while they still can. I’m Aaron Weitzman, and this has been your Muni Minute.