Americas Municipals Weekly Primary Review
Arizona State University, City of Burbank Slated to Refund Their Build America Bonds; Primary Market Expects $6B This Week
Mon 04/01/2024 15:10 PM
Arizona State University, or ASU, and the city of Burbank, Calif., are the next two borrowers looking to redeem their Build America Bonds, or BABs, according to EMMA notices posted last week. ASU is targeting $120.24 million of Series 2010A bonds, and Burbank is considering a redemption of the Series 2010 water and power electric revenue bonds.
The notices came on the heels of two BABs refundings last week that totaled $1.2 billion from the state of Washington and Purdue University, as reported. The BABs refundings were part of a heavy supply of $9.4 billion. Supply is expected to drop to $6 billion after the Easter holiday, according to the EMMA new issue calendar.
In the non-BABs segment of the market, on March 27, Morgan Stanley remarketed the $770 million Series 2023C Brightline Florida Passenger Rail Expansion Project revenue bonds issued by the Florida Development Finance Corp. Final pricing was in line with the previous week’s price talk, which consisted of an 8.25% coupon and a par call through the month of April with a premium of 104.5 from May 1 to Aug. 15.
On March 26, D.A. Davidson priced $246.7 million in tax increment revenue bonds via the Public Finance Authority on behalf of Miami Worldcenter Project. The nonrated deal received ample support from investors and was 9x oversubscribed, according to sources. The welcoming reception of the credit, however, had more to do with supply-and-demand imbalance right now in high-yield munis rather than credit quality, according to an investor.
“Over half of the fund inflows year to date is in high-yield funds, while new issue supply in high yield is well below average,” the source said. “Anything offering yield and especially a new name like this is seeing strong demand.”
Also last week, RBC Capital Markets priced the $43.595 million offering for the BB- rated La Salle University. The final deal structure added a 2030 maturity and split the original 2042 maturity into two separate tranches, one with a 6.25% coupon and the other with a 6.75% coupon. Earlier in the week, Cain Brothers priced a $108 million offering for the BBB- rated Three Pillars Senior Living Communities.
A snippet for the final pricing for the aforementioned deals is shown below:
Reorg compiled a list of potential borrowers coming to market in the first quarter of 2024 through a combination of EMMA disclosures and MuniOS deal alerts, as shown below. New additions this week include Cornell University, Lake Norman Charter School, Lutheran Senior Services and ASU.
The deals that have gone day to day since last June are shown in the chart below:
Reorg is also tracking Build America Bonds redemption notices that have been announced since the beginning of this year, as detailed below.
The notices came on the heels of two BABs refundings last week that totaled $1.2 billion from the state of Washington and Purdue University, as reported. The BABs refundings were part of a heavy supply of $9.4 billion. Supply is expected to drop to $6 billion after the Easter holiday, according to the EMMA new issue calendar.
In the non-BABs segment of the market, on March 27, Morgan Stanley remarketed the $770 million Series 2023C Brightline Florida Passenger Rail Expansion Project revenue bonds issued by the Florida Development Finance Corp. Final pricing was in line with the previous week’s price talk, which consisted of an 8.25% coupon and a par call through the month of April with a premium of 104.5 from May 1 to Aug. 15.
On March 26, D.A. Davidson priced $246.7 million in tax increment revenue bonds via the Public Finance Authority on behalf of Miami Worldcenter Project. The nonrated deal received ample support from investors and was 9x oversubscribed, according to sources. The welcoming reception of the credit, however, had more to do with supply-and-demand imbalance right now in high-yield munis rather than credit quality, according to an investor.
“Over half of the fund inflows year to date is in high-yield funds, while new issue supply in high yield is well below average,” the source said. “Anything offering yield and especially a new name like this is seeing strong demand.”
Also last week, RBC Capital Markets priced the $43.595 million offering for the BB- rated La Salle University. The final deal structure added a 2030 maturity and split the original 2042 maturity into two separate tranches, one with a 6.25% coupon and the other with a 6.75% coupon. Earlier in the week, Cain Brothers priced a $108 million offering for the BBB- rated Three Pillars Senior Living Communities.
A snippet for the final pricing for the aforementioned deals is shown below:
(Click HERE for the full table.)
Reorg compiled a list of potential borrowers coming to market in the first quarter of 2024 through a combination of EMMA disclosures and MuniOS deal alerts, as shown below. New additions this week include Cornell University, Lake Norman Charter School, Lutheran Senior Services and ASU.
| New Issue Calendar | ||||||
| Issuer | Obligor | Amount (000s) | Purpose | Timing | Deal Team | |
|---|---|---|---|---|---|---|
| Louisiana Public Facilities Authority | I-10 Calcasieu River Bridge Public-Private Partnership Program | $1,340,000 | Construction of a bridge replacement in Lake Charles, La. | Week of April 1 | JPMorgan, Wells Fargo | EMMA |
| Colorado Statewide Bridge and Tunnel Enterprise | Colorado Statewide Bridge and Tunnel Enterprise | $150,000 | Tax-exempt infrastructure revenue bonds | Week of April 1 | BofA Securities | EMMA |
| Board of Regents of the University of Oklahoma | University of Oklahoma | TBD | Revenue and refunding bonds for Series 2020C debt | April 8, 2024 | Barclays Capital Inc. | EMMA |
| State of Oregon | State of Oregon | $260,000 | Lottery revenue bonds | Week of April 15 | Goldman Sachs, Jefferies | EMMA |
| Arizona Board of Regents | Arizona State University | $376,890 | System revenue refunding bonds | April 16 | TBD | EMMA |
| Arizona Board of Regents | Arizona State University | $149,820 | SPEED revenue refunding bonds | April 18 | TBD | EMMA |
| State of Oregon | State of Oregon | $507,750 | State projects, grant programs | Week of April 22 | Morgan Stanley, Wells Fargo | EMMA |
| City of Houston | City of Houston | TBD | Refunding | Week of April 22 | Jefferies | EMMA |
| North Carolina Medical Care Commission | Novant Health | $2,500,000 | Facilities revenue bonds for construction | Week of April 29 | JPMorgan, RBC Capital Markets | EMMA |
| South Dakota Health and Educational Faciilities Authority | Avera Health | $465,000 | Finance capital projects; refunding prior debt | April 2024 | BofA Securities, JPMorgan, Colliers Securities | EMMA |
| TBD | Energy Northwest | $800,000 | Fund capital projects and refi outstanding debt | April 2024, May 2024 | JPMorgan, Wells Fargo, BofA Securities | EMMA |
| TBD | HonorHealth | $500,000 | Fund capital projects and refi Series 2019 debt | April 2024, Sept. 2024 | RBC Capital Markets, BofA Securities | EMMA |
| San Diego Unified School District | San Diego Unified School District | TBD | GO refunding bonds; tender offer | Week of May 6 | Jefferies, Siebert Williams Shank | EMMA |
| Airport Commission of the City and County of San Francisco | San Francisco International Airport | TBD | Revenue refunding bonds | Week of May 6 | Goldman Sachs, BofA Securities | EMMA |
| Metropolitan Washington Washington Airports Authority | Metropolitan Washington Airports Authority | TBD | Capital projects; refund Series 2014A, Series 2015A | May 2024 | BofA Securities | EMMA |
| Burbank-Glendale-Pasadena Airport Authority | Bob Hope Airport | $800,000 | New money | May 2024 | BofA Securities | EMMA |
| TBD | Chicago Park District | TBD | Finance capital improvements; Refund taxable Series 2021A bonds | April/May 2024 | Jefferies | EMMA |
| Utah Charter School Finance Authority | Ascent Academies of Utah | TBD | New money for construction | Prior to June 2024 | TBD | EMMA |
| TBD | Lutheran Senior Services | TBD | Refund Series 2014A,B; capital projects | June 2024 | Ziegler | EMMA |
| Union County Improvement Authority | Aries Linden, LLC | TBD | Solid waste disposal revenue bonds | Q2 2024 | TBD | EMMA |
| New Jersey Health Care Facilities Financing Authority | RWJ Barnabas Health | $680,000 | Refund Series 2013A, Series 2014A bonds; Capital projects | Q2 2024 | Jefferies | EMMA |
| TBD | Lake Norman Charter School Inc. | $35,000 | New construction | Mid-2024 | TBD | EMMA |
| Bonneville Power Administration | Port of Morrow, Ore. | $81,000 | Acquire transmission facilities | Summer 2024 | Wells Fargo, TD Securities, BofA | EMMA |
| Orange County, N.Y., Funding Corporation | Braemar at Wallkill | $35,500 | Refinancing Series 2012 debt | TBD | TBD | EMMA |
| City of Valparaiso, Indiana | Pratt Paper LLC | $175,000 | Refinancing Series 2013 debt | TBD | TBD | EMMA |
| Dormitory Authority of the State of New York | Cornell University | $1,100,000 | Fund new projects; refund prior bonds | TBD | BofA Securities, Goldman Sachs | EMMA |
The deals that have gone day to day since last June are shown in the chart below:
| Day-to-Day Calendar | ||||
| Issuer | Amount (000s) | Original Pricing Date | Deal Team | Intel |
|---|---|---|---|---|
| Domain at Midtown Park | $119,000 | June 1, 2023 | Goldman Sachs | Intel |
| QCF Behavioral Hospitals I | $232,000 | June 29, 2023 | Citigroup | Intel |
| Axis Kessler Park | $91,000 | July 27, 2023 | Goldman Sachs | Intel |
| Agape Community Sports Services | $43,000 | Aug. 3, 2023 | Citigroup | Intel |
| WFCS Holdings III | $43,000 | Aug. 14, 2023 | BofA Securities | Intel |
| LIPA | $823,000 | Oct. 3, 2023 | JPMorgan | Intel |
| Earlham College | $50,000 | Oct. 16, 2023 | PNC | Intel |
| Muse at Midtown | $91,000 | Oct. 16, 2023 | Citigroup | Intel |
| Clay Lacy Aviation | $44,000 | Nov. 16, 2023 | Wells Fargo | Intel |
Reorg is also tracking Build America Bonds redemption notices that have been announced since the beginning of this year, as detailed below.
| Build America Bonds Redemption Notices | ||||||
| Issuer | Obligor | Amount Targeted (000s) | Refunding Seres | EMMA Redemption Notice | Expected Timing | Deal Team |
|---|---|---|---|---|---|---|
| Midland County Hopital District of Midland County, Texas | Midland County Hopital District of Midland County, Texas | $79,575 | Series 2009B | EMMA | ||
| Commonwealth of Kentucky, State Property and Buildings Commission | Commonwealth of Kentucky, State Property and Buildings Commission | $183,990 | Series C (Project No. 117), Series D (Project No. 122), Series B (Project No. 125) | EMMA | March 21 | BofA Securities |
| Los Angeles Unified School District | Los Angeles Unified School District | $342,279 | Series 2009KY, Series 2010KY | EMMA | BofA Securities, Jefferies, RBC Capital Markets | |
| Bay Area Toll Authority | Bay Area Toll Authority | $1,500,000 | Series 2010S-1 | EMMA | JPMorgan | |
| Sacramento Municipal Utility District | Sacramento Municipal Utility District | $450,000 | Series 2009V, Series 2010W | EMMA | BoA Securities | |
| Trustees of Purdue University | Trustees of Purdue University | $100,705 | Series Z-2 | EMMA | April 2 | |
| City of Norfolk, Virginia | City of Norfolk, Va. | $117,650 | Series 2010B | EMMA | May 6 | BoA Securities |
| Department of Water and Power of the City of Los Angeles | Department of Water and Power of the City of Los Angeles | $316,000 | Series 2010A | EMMA | ||
| State of Washington | State of Washington | $1,222,545 | Series 2010D, Series 2010F | EMMA, EMMA | Week of March 25 | Wells Fargo, JPMorgan, Ramirez |
| North Carolina Turnpike Authority | North Carolina Turnpike Authority | $208,060 | Series 2010A | EMMA | ||
| New York State Environmental Facilities Corp. | New York Municipal Water Finance Authority | $156,415 | Series 2010B | EMMA | ||
| Regents of the University of California | Regents of the University of California | $456,110 | Series 2010F | EMMA | ||
| Maryland Transportation Authority | Maryland Transportation Authority | $676,135 | Series 2010B, Series 2009B | EMMA, EMMA | ||
| Arizona Board of Regents | Arizona State University | $120,240 | Series 2010A | EMMA | April 16 | |
| City of Burbank, California | City of Burbank, Calif. | $60,000 | Series 2010 | EMMA | Week of May 20, 2024 | BofA Securities, Loop Capital |
| City of Burbank, California | City of Burbank, Calif. | $30,000 | Series 2010B | EMMA | Week of May 13, 2024 | JPMorgan, Stern Brothers |
| TOTAL DEBT TARGETED | $6,019,704 | |||||
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