Bond Buyer 6/18/14 8:01am ET By Hillary Flynn & Maria Bonello

The $900 million triple-A Texas Department of Transportation general obligation mobility fund and refunding bonds Bank of America Merrill Lynch is scheduled to bring to market on Wednesday may be priced at a wider spread than the other triple-A deal that was sold this week, the $978 million Georgia GOs auctioned on Tuesday, a trader in Virginia said.
The spread on the biggest chunk ($325.4 million) of the five-part Georgia GO deal ranged from negative two basis points for the 11- and 13-year maturities, to 37 basis points for the 15-year.
“The Texas deal is attractive, it is triple-A, so regardless it will get demand anyway,” the trader said. “But it will probably get more spread than the state of Georgia deal.”
The Texas deal is the largest negotiated deal this week. The deal is rated triple-A by Moody’s Investors Services, Standard and Poor’s and Fitch Ratings.
A trader in Texas said the market is focusing more on the Texas name than the transportation aspect.
“Even though it’s a Texas transportation bond, it’s a GO of the state and that’s what people are going to focus on,” a trader in Texas said.
Loop Capital Markets will bring $555 million of Chicago Transit Authority sales tax receipts revenue bonds on Wednesday. The deal is rated double-A by S&P and Kroll Bond Rating Agency.
“The Chicago transit deal will be one to watch,” a North Carolina trader said. “I’m interested in seeing where spreads will be priced and if it will bring incremental yields into the market although there have been other Chicago deals lately.”
Jefferies will hold a retail order period for $400 million of Metropolitan Transportation Authority revenue bonds on Wednesday. The deal is rated A2 by Moody’s, A-plus by S&P and A by Fitch.
“I’m interested in seeing where the MTA deal’s spreads will end up,” the North Carolina trader said. “There are a lot of smaller deals this week too that I will be keeping an eye on to see where they place.”
In the competitive market, Houston is expected to auction $200 million of tax and revenue anticipation notes on Wednesday. The deal is rated F1-plus by Fitch Ratings.

June 19th, 2014|taxes, Texas, TXDot|