Fighting to get a bite on the week's limited inventory, traders have put in bids days early for this week's handful of smaller regional deals.
Wednesday's calendar will be no exception, with many of the competitive deals many times oversubscribed, said a mid-Atlantic trader. The only deal scheduled for Wednesday of any true size is a two-part Connecticut general obligation deal. The state plans to issue a total of $500 million split between a tax-exempt and taxable parts.
The tax-exempt portion is a $300 million unlimited general obligation deal set for auction at 10:30 a.m., according to data provided by TM3. The issue has maturities ranging from 2015 to 2034 and it is rated AA by Standard & Poor's and Fitch Ratings and Aa3 by Moody's Investors Service.
The taxable portion totals $200 million GOs with maturities ranging from 2015 to 2024 set for bids at 11am. The taxable tranche is rated the same as the tax-exempt.
After the Nutmeg State, inventory drops off dramatically, with only small regional deal scheduled to price, according to TM3. Despite the size, the smaller deals are picking up widespread interest from firms that ordinary would take a pass.
"If we can get our arms around the credit or we already know it, we're willing to do a smaller deal because that's just all there is," said a Virginia based trader.
An example of one of these deals is the Kannapolis, N.C., limited general obligation bonds set to price Wednesday in the negotiated market. Though the deal will only total $24.5 million, it has picked up widespread interest thanks to relatively generous spreads and its timing.
"We heard the spreads were plus 45 in the 10-year maturities," said the Virginia based trader. "That's just talk, but at spreads like that, we had to put an order in."
The deal is led by PNC Capital Markets and rated A-plus by Standard & Poor's, according to TM3. The trader expects the deal to be many times oversubscribed.
"We're preparing for a riot [on Wednesday]," said the trader, noting the intense interest on the deal. "We'll put in orders two or three days before a deal comes to market these days. Once we get the scales, we'll get back to them within a few hours to tell them if we're interested."
