Municipal bond yields close mixed; Genesis Health Care, Ohio, brings $295 million of bonds

By Sheri Kasprzak

New York, April 24 - Municipal yields were mixed throughout the day on Wednesday as the middle stagnated and longer bonds showed strength, market sources said.

"Out past 20 years, yields are dropping, but intermediate bonds are struggling a bit," said a trader in the afternoon.

Meanwhile, 10-year municipal-to-Treasury ratios are at 100%, said Alan Schankel, managing director with Janney Montgomery Scott LLC, after 10-year AAA munis closed Tuesday at 1.7%.

Genesis bonds price

Heading up the day's primary action, Muskingum County, Ohio, came to market with $295 million of series 2013 hospital facilities revenue bonds for Genesis Health Care System.

The bonds (Ba1/BB+/) were sold through Barclays.

The bonds are due 2016 to 2023 with term bonds due in 2027, 2033, 2044 and 2048. The serial coupons range from 4% to 5%, and the term bonds have 5% coupons. The 2027 bonds priced at 103.909, the 2033 bonds priced at 100.761, the 2044 bonds priced at 98.753, and the 2048 bonds priced at 96.791.

"High-yield Genesis Health Care System in Ohio were repriced to lower yields based on strong demand ... the 20-year maturity was a 5% coupon to yield 4.9% to call, 229 basis points over the AAA index," Schankel said Wednesday.

Proceeds will be used to finance the acquisition, construction, renovation, equipping and installation of health-care facilities and to refund and retire some outstanding taxable debt.

Wisconsin 45 bps over benchmark

Elsewhere, bidding was reportedly tight on the State of Wisconsin's $410.25 million sale of series 2013A general obligation bonds (Aa2/AA/AA).

"The longest maturity, 2033, was priced as 4% to yield 3.06% to call, 45 basis points over the MMD 20-year benchmark of 2.61%," Schankel said Wednesday.

The bonds priced competitively on Tuesday.

The bonds are due 2014 to 2020 and 2023 to 2033 with 2% to 5% coupons.

Proceeds will be used to acquire, construct, develop, extend, enlarge and improve land, water, property, highways, buildings, equipment or facilities for public purposes.

Houston deal ahead

Looking to primary action for the rest of the week, the City of Houston is expected to sell $332.5 million of public improvement bonds.

The deal includes $250 million of series 2013A refunding bonds, $75 million of series 2013B refunding bonds and $7.5 million of series 2013A demolition program certificates of obligation.

The bonds (/AA/AA) will be offered through Rice Financial Products Co.

Proceeds from the deal will be used to refund existing debt and to demolish dangerous structures in the city.

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