Sup­ply-Hun­gry Buy­ers See State Deals Come to Mar­ket

The Bond Buyer - - Market News -

Two deals from state is­suers came to mar­ket on Wed­nes­day as mu­nic­i­pal bond buy­ers were treated to a large ne­go­ti­ated deal from Mas­sachusetts and three big com­pet­i­tive sales from Wash­ing­ton state.

Mor­gan Stan­ley priced and repriced Mas­sachusetts’ $726.57 mil­lion of gen­eral obli­ga­tion and GO re­fund­ing bonds for in­sti­tu­tional in­vestors af­ter hold­ing a one-day re­tail or­der pe­riod.

The deal is rated Aa1 by Moody’s In­vestors Ser­vice, AA by S&P Global Rat­ings and AA-plus by Fitch Rat­ings.

“We are very happy with the re­sults of the sale, as both the re­tail and in­sti­tu­tional pe­ri­ods yielded pos­i­tive re­sults,” said Sue Perez, Mas­sachusetts Deputy Trea­surer for Debt Man­age­ment. “We achieved over $44 mil­lion in sav­ings from the re­fund­ing por­tion of the deal.”

The deal re­ceived $275 mil­lion in to­tal re­tail par­tic­i­pa­tion with over $28 mil­lion from in­di­vid­ual in­vestors, ac­cord­ing to Perez. “We were pleased to have broad par­tic­i­pa­tion from over 70 dif­fer­ent ac­counts, in­clud­ing some new ones. We were able to be flex­i­ble with the struc­tur­ing , of­fer­ing a va­ri­ety of coupons and ma­tu­ri­ties to re­spond to in­vestor in­quiries and in­ter­est.”

She also added that this $727 mil­lion trans­ac­tion marked the fi­nal trans­ac­tion of three over the past week for the Com­mon­wealth, which in­cluded a $1.5 bil­lion rev­enue an­tic­i­pa­tion note sales last week and a $163 mil­lion ne­go­ti­ated is­sue of Mas­sachusetts Clean Wa­ter Trust bonds ear­lier this week.

In the com­pet­i­tive arena, Wash­ing­ton state sold $502.13 mil­lion of GOs in three of­fer­ings.

Cit­i­group won the $262.915 mil­lion of Se­ries 2019A var­i­ous pur­pose GOs with a true in­ter­est cost of 3.8175% Citi also won the $145.78 mil­lion of Se­ries 2019T tax­able GOs with a TIC of 3.3357%

Mor­gan Stan­ley won the $93.435 mil­lion of Se­ries 2019B mo­tor ve­hi­cle fuel tax GOs with a TIC of 3.6141%.

Mon­tague DeRose & As­so­ciates and Piper Jaf­fray are the fi­nan­cial ad­vi­sors and Foster Pep­per is the bond coun­sel.

The deals are rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

Dal­las com­pet­i­tively sold $155.66 mil­lion of Se­ries 2018C water­works and sewer sys­tem rev­enue re­fund­ing bonds.

Mor­gan Stan­ley won the bonds with a TIC of 3.5685%. Hill­top Se­cu­ri­ties and Estrada Hi­no­josa are the fi­nan­cial ad­vi­sors and McCall Parkhurst and Es­camilla & Po­neck are the bond coun­sel.

The deal is rated AAA by S&P and AA plus by Fitch.

Since 2008, Dal­las has sold over $5 bil­lion of debt, with the most is­suance oc­cur­ring in 2010 when it sold $836.7 mil­lion of bonds. Prior to this year, it sold the least amount of debt in 2011, when it is­sued $239.4 mil­lion of bonds. Bank of Amer­ica Mer­rill Lynch priced and repriced the Na­tional Fi­nance Au­thor­ity, N.H.’s $169.595 mil­lion of re­source re­cov­ery re­fund­ing rev­enue bonds for the Co­vanta project con­sist­ing of Se­ries 2018A bonds sub­ject to the al­ter­na­tive min­i­mum tax, Se­ries 2018B non-AMT bonds and Se­ries 2018C AMT bonds.

The deal is ex­pected to be rated B1 by Moody’s and B by S&P.

BAML priced and repriced the Ni­a­gara Area De­vel­op­ment Corp., N.Y.’s $165.01 mil­lion of solid waste dis­posal fa­cil­ity re­fund­ing rev­enue bonds for the Co­vanta project con­sist­ing of Se­ries 2018A AMT bonds and Se­ries 2018B non-AMT bonds.

The deal is ex­pected to be rated B1 by Moody’s and B by S&P.

JPMor­gan Se­cu­ri­ties re­ceived the of­fi­cial award on the West Virginia Hospi­tal Fi­nance Au­thor­ity’s $271.575 mil­lion of Se­ries 2018A tax-ex­empt and Se­ries 2018B tax­able hospi­tal re­fund­ing and im­prove­ment rev­enue bonds for the Cabell Hunt­ing­ton Hospi­tal Ob­li­gated Group.

The deal is rated Baa1 by Moody’s and BBB-plus by S&P. ◽

By Chip Bar­nett & aaron Weitz­man

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