DASNY’s $2B of Deals Dominate $4.97B New-Issue Slate
Top-shelf municipal bonds ended mixed on Friday ahead of a smaller-than-average new issue calendar that is dominated by a variety of offerings from the Dormitory of the State of New York.
Traders will also be looking at muni bond trades, which have shown recent weakness.
“Until this week, munis hadn’t kept up with the selloff in U.S. Treasuries,” Dan Heckman of U.S. Bank said on Friday. “But the short-end is still very expensive and it’s hard to make a case to buy shorter-term munis versus short-term corporates.”
Heckman added that his firm was very keen on yield positioning and currently sees more value in the intermediate- and long-term ends of the yield curve.
“We will begin to see more weakness when more supply starts to pick up,” he said.
Ipreo estimates total bond volume for the week at $4.97 billion, down from a revised total of
$8.68 billion the prior week, according to data from Thomson Reuters. The upcoming slate is composed of $2.29 billion of negotiated deals and $2.68 billion of competitive sales.
The week’s headline act is DASNY, which will be offering buyers more than $2 billion of bonds in one negotiated deal and five competitive sales.
On Tuesday, DASNY will competitively sell $1.7 million of general purpose state personal income tax revenue bonds consisting of $530.94 million of Series 2017B bidding group 2 bonds, $530.065 million of Series 2017B bidding group 3 bonds, $529.595 million of Series 2017B bidding group 1 bonds, $86.8 million of Series 2017D taxable bonds and $21.845 million of Series 2017C tax-exempt bonds.
DASNY’s last deal in late June was rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings.
On Thursday, RBC Capital Markets will price DASNY’s $301.48 million of school districts and financing program revenue bonds in five series The Series 2017 F, G, H, I and J carry various ratings ranging from Aa2 and Aa3 from Moody’s to A-plus from S&P and AA-minus from Fitch.
In the short-term competitive arena, New York’s Triborough Bridge and Tunnel Authority will sell $400 million of Series 2017A general revenue bond anticipation notes on Monday. The BANs are rated MIG1 by Moody’s and F1-plus by Fitch.
Also in the negotiated sector, two deals are coming out of San Diego.
On Tuesday, Goldman Sachs is expected to price the San Diego Unified School District’s $220 million of Series 2017 general obligation bonds.
The deal is rated Aa3 by Moody’s and AAA by Fitch.
And on Thursday, JPMorgan Securities is set to price the San Diego Association of Government’s Series 2017A South Bay Expressway first senior lien toll revenue bonds. The deal is rated A by S&P and A-minus by Fitch.
The yield on the 10-year benchmark muni general obligation was unchanged from 2.00% on Thursday, while the 30year GO yield fell one basis point to 2.84% from 2.85%, according to the final read of Municipal Market Data’s triple-A scale. ◽