May 23 Airport bonds lead the $4.3 billion of
U.S. municipal bond sales next week, a slight slump as the
market closes for the Memorial Day holiday on Monday, according
to Thomson Reuters estimates.
The city of Chicago and Metropolitan Washington Airports
Authority in D.C. will issue $784 million and $542 million in
airport revenue and refunding bonds. This week, for the first
time in two months, Metropolitan Washington Airports Authority
bonds outpaced Puerto Rico-related bonds for most actively
traded, according to Barclays.
The Metropolitan Washington Airports Authority issued
approximately $422 million earlier this month to help construct
a 23-mile rail linking the Metrorail to Dulles International
Airport, among other capital improvement projects, through toll
revenue. That issue, called Dulles Toll Road Second Senior Lien
Revenue Refunding Bonds, Series 2014A, was rated Baa1 from
Moody's and BBB-plus from S&P.
Next week's Metropolitan Washington Airports Authority
revenue and refunding bonds are rated A1 from Moody's and
AA-minus from Fitch. The bonds will largely refund existing
bonds with lower interest rates.
That's also the motive behind next week's biggest sale.
Chicago will issue $784 million of revenue and refunding bonds
for Midway Airport. Moody's assigned an A3 to the bonds, noting
that the airport has enjoyed strong growth by Southwest
"Lower interest rates can help with financing costs. This is
something we see across the industry," said Seth Lehman, a
senior director at Fitch Ratings. "Rates have rallied, the yield
has come down, so certainly more savings can be gained."
The airport bonds are two of the largest on the negotiated
calendar, which totals $3.85 billion next week, compared to $427
million on the competitive calendar.
(Reporting By Robin Respaut; editing by Andrew Hay)