U.S. municipal bond market supply shrank on Monday in the face of an East Coast blizzard, with Pennsylvania pushing off a $1 billion general obligation debt sale until next week and cash-strapped Atlantic City delaying a $12 million bond anticipation note deal.
Altogether, issuers postponed $1.7 billion of municipal bond sales, including more than two-thirds of the week's competitive deal calendar, as what the National Weather Service called a "crippling and potentially historic blizzard" bore down on Wall Street.
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Pennsylvania had originally planned to bring its competitively bid deal, the largest sale of the week, to market on Tuesday morning. The sale is now scheduled for Feb. 3.
"There's weather concerns and a lot of people will probably not be going into work tomorrow," said Steve Heuer, debt director in the governor's budget office.
Similarly, Atlantic City, the New Jersey casino hub recently put under emergency management, rescheduled its debt sale slated to price on Tuesday, until later this week.
On Friday, Moody's Investors Service cut Atlantic City's credit rating deeper into junk, citing New Jersey Governor Chris Christie's appointment of a team to fix its deep financial problems.
Underwriters led by Morgan Stanley reacted to the storm by moving up to Monday the pricing of the week's biggest negotiated offering - $854 million of Utah Transit Authority sales tax revenue refunding bonds.
"We decided to accelerate the bond sale to today, mainly to accommodate for those affected by the winter weather in NYC," said Remi Barron, a transit authority spokesperson.
Savings from the refunding were estimated at $77 million.
A $209.5 million bond issue for Texas' Katy Independent School District, which was scheduled to price on Tuesday through J.P. Morgan Securities, was put on the day-to-day calendar, a market source said.
Issuers from Maine, Massachusetts, Pennsylvania, New Jersey, New York, Illinois, California, North Carolina and Connecticut pushed their competitively bid bond sales to the end of this week or next week, according to postponement notices from data company Ipreo.
The muni market ended Monday's trading session with yields unchanged, according to Municipal Market Data's benchmark triple-A scale.
(Reporting By Karen Pierog in Chicago and Lisa Lambert in Washington; Additional reporting by Hilary Russ in New York; Editing by Meredith Mazzilli and Leslie Adler)