New York Metropolitan Transportation Authority is selling $ 350 million in Build America Bonds

New York Metropolitan Transportation Authority is selling $ 350 million in Build America Bonds, a leading end of 2010 the issues of debt liabilities.

States and municipalities are scheduled to sell $ 400 million in federal grant values this week, the fewest since the last week of 2009. The drop follows two weeks of selling manufacturing assets in American history of the program 21 months. About $ 1.1 billion in bond issuance is expected, the lowest total since the week ended December 31, 2009.

Even if the transit agency is required to pay higher yields to get the deal done, is probably still cost less than the issuance of tax exempt after the program expires on December 31, said Peter Coffin, president of Boston Advisors Breckinridge Capital Inc., which manages about $ 13 billion in municipal debt, including $ 600 million in taxable.

The MTA, which faces a deficit of at least $ 207 million in 2012, has seen its budget of 12 billion U.S. dollars suffer for a payroll tax in New York and seven suburban counties adopted as part of a ransom of 2009 no has met projections. In January and February, the state has reduced its forecast for the grants by $ 336 million. The estimate was reduced another $ 50 million for the MTA in July.

In October, the agency increased fees and ticket prices for trains as part of a plan to generate $ 400,000,000 next year amid state funding cuts. The agency is also raising tolls on bridges and two tunnels starting December 30.

Extra Performance

The extra yield over Treasuries investors demand for 30 - year MTA Americas Build fell to 266 basis points on December 17, 275 basis points, where the authority of the securities sold in July, according to Municipal Securities data Regulatory Board.

"It's a slow week, but full of people not what the agreement will have a bit of attention," said Coffin. "It makes perfect sense in the world for them to try to capture the subsidy now."

The agency estimates call for all-in cost of borrowing by 4.65 percent against 5.5 percent for tax-exempt.

"We believe that there is liquidity to sell bonds," said Patricia McCoy Director of Finance at a meeting last week.

Building Americas was created under the stimulus legislation by President Barack Obama as a means to lower borrowing costs for cities and channeling money to job creation projects construction. While Obama and the Democrats supported the extension of the program, which have run into opposition from Republican critics of the stimulus. Extensions of two times last Democratic-controlled House only seat in the Senate.

With the certainty of Savings

"We were hopeful the Build America program would be extended," said Aaron Donovan, spokesman for the authority, in a telephone interview. "If it was not, he wanted to issue the bonds now to ensure we could achieve savings subsidy for sure."

The grant has been left out of the 858 billion U.S. dollars bill extending by two years the tax cuts of the Bush era. Rep. John Mica of Florida, which is destined to become Speaker of the House Transportation and Infrastructure in January, said Dec. 17 it plans to introduce a "reincarnation" Build America Bonds program next year.

Yields on top-rated tax-exempt municipal bonds for the past 30 years has decreased by about 10 basis points, following the proposal of Mica, the most since August 18, reaching 4.72 percent. bond prices to thirty years also confirmed shipping rates dropping 10 basis points, the most since November 16 at 4.44 percent.

The iShares S & P AMT Free National Bond Fund, an exchange-traded fund that tracks the Standard & Poor's index of municipal bonds, rose 1.32 percent on the same day, the highest since January 2009, 99, $ 96 held in New York Stock Exchange.

Continuation Program

If the proposed Mica is correct, then the result Building America can lead a rally for tax exemption in 2011, Regina said Shafer, who helps oversee $ 5.3 billion in tax-exempt municipal bonds as senior vice president of fixed income USAA Investment Management Co. in San Antonio.

"A lot of our low yield of Treasury bonds had been due to uncertainty about BAB" said Shafer. "If it does get extended, we would see an even stronger market into the next month."

More than $ 185 million in building America have been sold since April 2009. That exceeds the emission estimates from analysts at JPMorgan Chase & Co. and Barclays Plc, which forecast totals $ 100 million and $ 150 billion, respectively, during the advent of the program.

The following is a description of a pending sale of U.S. debt City:

BOARD OF REGENTS STATE OF UTAH, which oversees the higher education system, plans to sell $ 365 million in tax-exempt bonds and $ 24.5 million in debt subject to alternative minimum tax today to refinance existing debt. The securities will be backed by revenue from student loans, and carry the highest rating of Moody's Investors Service and the third highest rating, AA by Standard & Poor's. RBC Capital Markets and Bank of America Merrill Lynch to underwrite the offering. (Added 20 December)