DASNY’s $2B of Deals Dom­i­nate $4.97B New-Is­sue Slate

The Bond Buyer - - Market News - BY CHIP BAR­NETT

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. ◽

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