Muni yields continue to get pummeled; Catholic Health to bring $410.89 million revenue bonds

By Sheri Kasprzak

New York, Oct. 7 - Municipal yields yet again closed higher, underperforming Treasuries and pushing ratios higher again, market insiders reported.

Traders said Friday that yields on seven-year bonds were up almost 11 bps. Five-year yields were up more than 7 bps, and 10-year yields were up more than 6 bps.

Following on the heels of a huge wave of new offerings, the heavy supply is poised to continue, said Alan Schankel, managing director with Janney Montgomery Scott LLC. Thirty-day visible supply is at $12.6 billion, said Schankel, the highest level of the year. Supply for the coming week, even with the Columbus Day holiday, is expected to be around $8 billion.

One of the major offerings of the week comes from Catholic Health Initiatives, which is expected to bring $410.885 million of series 2011 revenue bonds (Aa2/AA/AA) through J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The offering is comprised of $308.84 million of series 2011A revenue bonds being sold through the Colorado Health Facilities Authority and $102.045 million of series 2011A revenue bonds being offered through the Washington Health Care Facilities Authority.

Proceeds will be used to construct, renovate and acquire facilities operated by Catholic Health.

Honolulu preps sale

Also coming up in the week ahead, the City of Honolulu is gearing up to offer $232.08 million of series 2011 wastewater system revenue bonds (Aa2/AA/) with Bank of America Merrill Lynch and Piper Jaffray & Co. as the senior managers.

The deal includes $164.955 million of series 2011A bonds due 2016 to 2031 with term bonds due in 2036 and 2041 and $67.125 million of series 2011B bonds due 2016 to 2023.

Proceeds will be used to refund the city's series 2005A and 2006A-C wastewater system revenue bonds.

Cook County brings G.O. bonds

In new offerings, Cook County, Ill., sold $612.42 million of series 2011 general obligation bonds, said a pricing sheet.

The bonds (Aa3/AA/AA-) were sold through William Blair & Co. Inc. and Cabrera Capital Markets LLC.

The offering included $252.2 million of series 2011A G.O. refunding bonds, $130.02 million of series 2011B taxable G.O. refunding bonds, $125 million of series 2011C taxable G.O. bonds and $105.2 million of series 2011D taxable corporate purpose G.O. bonds.

The 2011A bonds are due 2014 to 2025 with a term bond due in 2028. The serial coupons range from 4% to 5%. The 2028 bonds have a split maturity with a 4.875% coupon priced at 98.574 and a 5.25% coupon priced at 103.893.

The 2011B bonds are due 2016 to 2027 with 2.932% to 5.54% coupons, all priced at par.

The 2011C bonds are due Nov. 15, 2033 and have a 6.205% coupon priced at par.

The 2011D bonds are due Dec. 15, 2011 and have a 2% coupon priced at 100.226.

Proceeds will be used to fund the capital needs of the county and refund existing G.O. bonds.

New York Liberty deal ahead

Looking to deals out on the horizon, the New York Liberty Development Corp. plans to come to market with $2.594 billion of series 2011 multi-modal liberty revenue refunding bonds for the World Trade Center project, said a preliminary official statement.

The deal includes $2.573 billion of series 2011A bonds and $20.31 million of series 2011B bonds.

The bonds will be sold through Goldman Sachs & Co.

The bonds are due Dec. 1, 2049. The 2011A bonds will bear interest at a fixed rate, and the 2011B bonds will bear interest initially at the weekly rate.

Proceeds will be used to construct five new skyscrapers, a retail center, a transportation hub, a performing arts center and the National September 11 Memorial and Museum at the World Trade Center site.

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