Investor activity in the bond market boomed in February, as the uncertain future of the tax-exempt status leaves many wondering how far the Trump administration will go to keep the Tax Cuts and Jobs Act of 2017 alive.
On Feb. 25, the U.S. House of Representatives passed a budget resolution 217-215 that advances the mission among House Republicans to deliver on the promise of "President Trump's full America First agenda, not just parts of it," House Speaker Mike Johnson, R-La., said after the vote.
The key parts of the
Widespread calls for cost reductions have municipal bond market advocates wary that the
"There will be ongoing debates and discussions in the coming weeks, and we remain focused on working through the process to deliver on our promises made to the American people," House Speaker Mike Johnson, R-La., said in
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Munis trended well at the end of last month. Reports from Municipal Market Data found the two-year municipal to UST ratio Feb. 27 was at 62%, the five-year at 64%, the 10-year at 67% and the 30-year at 86%.
Similar data from ICE Data Services reported the same for the two-, five- and 10-year ratios, differing only in their 30-year measurement at 85%.
Last month, major deals ranged from the $2.5 billion Brightline West pricing of unrated private activity bonds to the Hawaii Department of Transportation's $849 million issuance of tax-exempt airport system revenue bonds, which officials say is the largest in the system's history and the first to garner double-A ratings from the three major agencies.
Learn more about each of the issuances below.
Brightline West's shining $2.5 billion bond pricing
The Las Vegas-Los Angeles bullet train Brightline West hit the market on Feb. 20, bringing $2.5 billion of unrated private-activity bonds and roughly double-digit yields.
Two buyside sources that spoke with The Bond Buyer said the deal, which included a $2 billion CUSIP, drew orders of more than $3.4 billion across 75 participating accounts. The bonds were priced at a discount with 9.5% coupons.
"To compare this deal with other opportunities in the high-yield market, you're getting more liquid trading bonds, an excellent yield and good sponsorship with a very good economic premise behind it," Jim Lyman, senior vice president at Belle Haven Investments, which participated in the deal, told The Bond Buyer's
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Miami-Dade County enters the market with aviation bond issuance
Following a post-pandemic surge in passengers, Miami-Dade County came to market with $526 million worth of aviation revenue bonds.
The deal featured $263.8 million in tax-exempt Series A bonds subject to the alternative minimum tax, $71.6 million in tax-exempt Series B bonds and $190.5 million in taxable Series C bonds. Both S&P Global Ratings and Fitch Ratings assigned an A-plus rating to the bonds, while Kroll Bond Rating Agency gave them an AA-minus.
The results are "a testament to the exceptional leadership of MIA Director and CEO Ralph Cutié, the dedication of our industry partners, and the hard work of the entire MIA team," Daniella Levine Cava, mayor of Miami-Dade County, told The Bond Buyer's
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NYC TFA's $1.95 billion test of the market
The New York City Transitional Finance Authority priced $1.95 billion of future tax secured subordinate bonds on Feb.13, which feature $1.7 billion of tax-exempt fixed-rate bonds and $247 million of taxable fixed-rate bonds.
According to the
S&P Global Ratings and Fitch Ratings assigned a AAA rating to the deal, while Moody's Ratings was slightly less optimistic with its Aa1 rating.
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Hawaii Department of Transportation breaks ground with $849 million issuance
It's a deal of many firsts for the Hawaii Department of Transportation's $849 million issuance of tax-exempt airport system revenue bonds, which hit an eager market on Feb. 13.
Officials with the state's airport system said this deal, which is the largest to hit the market in the system's history, is the first time it has garnered double-A ratings from the three major bond rating agencies. Officials credited strong passenger activity for the ratings. Funding will be used to fuel terminal reconstruction, tarmac repairs, building development and other projects.
"This bond issuance provides critical funding that will allow us to deliver on our commitment to continue upgrading airport infrastructure, modernizing facilities and improving operational efficiencies," Ed Sniffen, director of the Hawaii DoT, said in a
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Charlotte's $400 million issuance gets go-ahead from state officials
Charlotte, North Carolina, is gearing up for a $400 million sale of general obligation municipal bonds after the deal was approved by the Local Government Commission, an arm of the Department of State Treasurer, on Feb. 4.
The deal is broken down with $238 million for transportation, $100 million for funding affordable housing and $61.7 million for neighborhood improvement efforts; all of which are backed by a tax increase estimated at 0.25 cents per $100 of assessed property valuation according to the
"The city plans to use the housing bonds to serve low- and moderate-income families. … The neighborhood bond incorporates sidewalk installations, pedestrian and bike paths and traffic controls," the release said.
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