NEW YORK Feb 7 New municipal bond issuance is
set to fall to around $3.3 billion next week, with the state of
Louisiana issuing an assurance on costs related to the 2010 oil
spill in the Gulf of Mexico before a planned sale of nearly $500
million of state-backed debt.
Louisiana's sale of general obligation bonds, slated for
Tuesday, includes nearly $350 million in tax-exempt bonds and
$150 million in taxable bonds. It is expected to be the biggest
deal of the week.
The preliminary official statement includes an assurance
from the state that it will continue to recoup all costs related
to the Deepwater Horizon oil spill in 2010. The cost of the
cleanup could reach more than $40 billion.
"The state is continuing to measure these impacts and will
seek recovery from BP and the responsible parties," according to
the document released Monday.
A year after agreeing to a multibillion dollar settlement
with victims of the oil spill, BP, the oil company behind
the spill, is aggressively challenging terms of the deal.
Altogether, the oil producer has set aside some $42 billion to
pay for cleanup and other costs.
The proceeds of the sale are earmarked for uses such as $34
million for economic development, $41 million for general
government and nearly $10 million for levees and ports. The
biggest portion of the deal is $200 million for "non-state
entities," according to an official filing.
Next week's negotiated deals will account for $2.1 billion
of the weekly tally and competitive deals are slated to reach
$1.2 billion for the week, according to Thomson Reuters
calculations estimates on Friday. Last year, the weekly average
issuance was $5 billion.
Other larger deals include the New York State Mortgage
Agency issuing about $179 million of home mortgage revenue bonds
in a deal led by Morgan Stanley.