Municipal yields get a touch firmer; Stanford Hospital brings $233.77 million refunding bonds

By Sheri Kasprzak

New York, June 4 - Municipal yields were seen slightly firmer to round out the week, traders reported.

"In spots, yields might be down by a basis point or so," one trader said.

"It's been a quiet day. Pretty typical Friday. You know, I expect in the coming weeks that things will pick up a little bit [in secondary]. We're heading into the summer, and primary tapers off somewhat. Investors get a little more excited about secondary."

In light Friday primary activity, the California Health Facilities Financing Authority priced $233.765 million in series 2010 refunding revenue bonds for Stanford Hospital and Clinics, said a pricing sheet.

The sale included $87.055 million in series 2010A bonds and $146.71 million in series 2010B bonds.

The 2010A bonds are due 2011 to 2021 with term bonds due 2025 and 2031. The coupons range from 4% to 5%. The 2025 bonds have a 5% coupon and priced at 102.859. The 2031 bonds have a split maturity. One of the bonds has a 5.25% coupon and priced at 102.823. The other bonds have a 5.75% coupon and priced at 108.135.

The 2010B bonds are due 2025, 2031 and 2036. The 2025 and 2031 bonds have split maturities. One of the 2025 bonds has a 4.5% coupon and priced at 98.358, and the other has a 5% coupon and priced at 102.859. The 2031 bonds have a 5.25% coupon, which priced at 102.823, and a 5.75% coupon that priced at 108.135. The 2036 bonds have a 5% coupon and priced at 98.553.

The bonds (Aa3/A+/AA-) were sold through Morgan Stanley & Co. Inc.

Proceeds will be used to refund the hospital's series 1998B and 2003B-D bonds, which were used to construct, equip and renovate Stanford Hospital and Clinics facilities.

The Sacramento-based authority provides financing for health-care facilities throughout the state.

Montclair State bonds price

Elsewhere Friday, New Jersey Economic Development Authority priced $211.39 million in series 2010 tax-exempt general obligation bonds for Montclair State University, said a pricing sheet.

The bonds (Baa3) were sold through lead manager Bank of America Merrill Lynch.

The bonds are due 2012 to 2021 with coupons from 3% to 5.25%. The issue also includes term bonds due 2025, 2031 and 2042.

The 2025 bonds have a 5.375% coupon and priced at 98.934. The 2031 bonds have a 5.75% coupon and priced at 99.636. The 2042 bonds have a 5.875% coupon and priced at 99.213.

Proceeds will be used to finance the construction of an on-campus student housing facility consisting of 1,978 student housing beds and a 24,000-square-foot dining facility as well as to make a deposit to a debt service reserve fund.

Based in Trenton, the authority provides financing for small businesses and other economic development projects.

New York to bring bonds

Looking to the week ahead, the City of New York will lead primary activity with its scheduled $800 million sale of series 2010H G.O. bonds. The offering is set for Wednesday.

The bonds (Aa2/AA/) will be sold on a negotiated basis. Morgan Stanley will lead the syndicate.

The offering is comprised of $780 million in series 2010H-1 Build America Bonds and $20 million in series 2010H-2 tax-exempt bonds.

Both subseries are due 2012 to 2036.

Proceeds from the offering will be used for general capital purposes.

Moody's drops Illinois

Some troubling news for the State of Illinois may negatively impact its upcoming sale of $492 million in series of June 2010 junior obligation sales tax revenue bonds, which is scheduled for June 16.

Moody's Investors Service downgraded the state's G.O. debt to A1 from Aa3 on Friday after the state failed to enact measures to address its budget imbalance for the fiscal year beginning in July.

"This failure underscores a chronic lack of political will that indicates further erosion of an already weak financial position," wrote Moody's analysts Edward Hampton and Edith Behr.

The state's upcoming deal set for later this month could suffer from the downgrade, as could other future offerings.

"It really could have an impact," said one sellsider when asked about the deal.

"Illinois has been in a real mess for most of this year, so it's not a really surprising move. That is a pretty significant cut, so it will make a difference on any upcoming pricing."

The state will bring the June 16 sale through Cabrera Capital Markets LLC.

Proceeds from the offering will be used to construct, reconstruct, modernize and extend various state infrastructure projects; develop and improve educational, scientific, technical and vocational programs and facilities, as well as expand health and human services; protect, preserve, restore and conserve the state's natural resources; and provide incentives for the expansion of businesses into the state.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.