Continuing talks for a new airport terminal will keep the New York City Industrial Development Authority's $419 million deal hanger-bound until next week.
"Nothing's holding up the talks, and what they're talking about I can't discuss," Catie Marshall, a spokeswoman for the city Economic Development Corp., said yesterday.
Marshall said, however, that the city throught it inappropriate to issue a preliminary official statements for the deal before talks regarding the new terminal at John F. Kennedy International Airport had been concluded.
While Smith Barney Inc. was scheduled to bring the offering this week, Bob DeMichiel, a managing director there, said a week's delay is minor considering the terminal project has been in the works for three-and-a-half years.
The negotiations involved New York City, the Port Authority of New York and New Jersey, and the airlines, DeMichiel said, adding that he was not aware of the exact content of the negotations. The city owns the land and leases it to the Port Authority. The lease runs till 2015. The Port Authority will sublet it to the airlines, DeMichiel said.
The 10-gate international terminal at JFK will occupy the site of the former Eastern Airlines terminal, which will be demolished. Four airlines, Lufthansa German Airlines, Air France, Japan Airlines and Korean Air Lines will occupy the new site, DeMichiel said. The project is expected to be completed by Aug. 1, 1998.
Elsewhere in the primary sector, Pennsylvania yesterday increased the size of its competitive general obligation bond offering to $470 million from $355 million. The deal is slated for sale today.
In secondary activity yesterday, dollar bonds dropped 3/8 point. High-grade issues finished slightly softer although thin activity made gauging levels difficult, a municipal analyst said. Activity overall was light to moderate.
The analyst cited yesterday's decline in Treasuries and the flurry or economic reports arriving this week as factors forcing municipal prices lower. The market recieves May's consumer price index report and retail sales today. Industrial production and capacity utilization arrive tomorrow, and housing starts will be announced on Thursday.
Marilyn Schaja, a money market economist at Donaldson, Lufkin & Jenrette Securities Corp., expects a 0.3% increase in both the overall and core CPI ratews. A bigger increase would bode poorly for the market, Schaja said.
In the event of an increase larger than 0.3%, "I think the bond market is going to get hurt because it probably means that we are going to see a Fed tightening sooner rather than later," she said.
Some other economists are looking for a 0.2% rise overall, and a 0.3% rise in the core rate.
One trader said municipals are currently priced fairly aggressively relative to Treasuries, so when governments dropped yesterday, municipals followed.
The trader also cited some institutional lists out for the bid. While they were not big lists, "they weren't the blocks the street had an appetite for," he said.
A municipal analyst concurred about the aggressive prices for municipals.
"We're down near the 80% level," he said, adding that municipals yields hit that percentage of Friday. Anytime municipals have grown that rich to Treasuries in roughly the past four years, the market has gotten hit, he said. However, considering the sharp drop in new supply, it's unclear whether the 80% test will hold, he said.
Elsewhere yesterday, dealer inventories have reversed their downward trend as Standard & Poor's Corp's Blue List rose $74 million, to $1.61 billion. In the past two business days, the Blue List has increased $194 million. From June 1 through June 9, the list fellby $322 million.
On the rating front yesterday, Moody's investors Service downgraded Maricopa County's, Arizona, general obligation bonds to A from Aa, citing "poor financial performance.
"Lack of control over expenditure growth, particularly health care costs, and reluctance to increase the revenues during a period of declining property value resulted in a rapid deterioraion of the country's overall financial position," a Moody's release said.
"It is imperative that the Board of Supervisors provide unified leadership, and adopt a plan to regain fiscal integrity on a timely basis of maintain upper medium grade security," Moody's said.
Late last month, Standard & Poor's downgraded Maricopa County to A from AA and placed the country on CreditWatch with negative implications. The agency cited "the county's continued need for external lending to support general fund cash flow and a lack of an adopted budget workout plan to ameliorate" the projected $60 million budget deficit for fiscal 1995.