| SAN FRANCISCO, March 24
SAN FRANCISCO, March 24 Connecticut will return
to the U.S. municipal market on Tuesday when it will sell $750
million in general obligation bonds as the state faces negative
outlooks from two of the three biggest Wall Street credit rating
S&P Global Ratings on Tuesday rated the bonds AA- with a
negative outlook due to the state's above-average debt, high
unfunded pension liabilities and large unfunded postemployment
Credit ratings agency Moody's assigned the bonds Aa3 with a
negative outlook, while Fitch assigned the bonds a AA- rating
with a stable outlook.
The northeast state is struggling to close a $1.7 billion
budget hole for fiscal 2018.
To address the gap, Governor Dannel Malloy last month
proposed nearly $1.4 billion of spending cuts, including big
savings from negotiations with labor unions, to fill the budget
Next week's tax-exempt calendar is modest with $5.8 billion
scheduled to hit the market, an amount that is shy of the weekly
average of $6 million, according to according to Municipal
Market Data, a Thomson Reuters unit.
On Monday, the city of San Jose, California will offer $641
million in airport revenue refunding bonds and the New Jersey
Turnpike Authority will offer $525 million in bonds in a deal
managed by Goldman Sachs.
After three straight weeks of outflows, U.S. municipal bond
funds posted inflows of $173 million for the week ended March
22, according to data from Lipper, a Thomson Reuters company.
Congressional leadership and the White House chose not to
bring the Republican health care bill up for a vote, paving the
way for President Donald Trump to push a tax-reform package,
which could find better reception in Congress.
The prospect of Congress turning its attention to tax reform
left bond market buyers tentative, according to Randall Smolik,
an analyst with Municipal Market Data, a Thomson Reuters unit.
(Reporting by Rory Carroll; Editing by Cynthia Osterman)