Yields close flat to a touch weaker; Massachusetts Development Finance brings $271.14 million

By Sheri Kasprzak

New York, Jan. 6 - Municipal yields were largely unchanged with some weakness seen in longer maturities, said a trader reached during the session.

"There's not a lot of movement, but out around 30 years, it does get a little weaker," said one trader.

"Probably 2 to 3 basis points at most beyond 30 years. Otherwise, I'd call it flat. There's been some [trading] activity today, more than the past couple of weeks. It feels like the market is getting back down to business."

Meanwhile, the primary side of the market finally picked up after a lull around the holidays. The Massachusetts Development Finance Agency led pricing action with its $271.135 million sale of series 2011K revenue bonds for Partners HealthCare System. The agency intends to raise a total of $420.075 million in the offering.

The agency sold $73.495 million of series 2011K-4 bonds, $66.855 million of series 2011K-5 bonds and $130.785 million of series 2011K-6 bonds. The offering also includes $50 million of series 2011K-1 bonds, $50 million of series 2011K-2 bonds and $48.94 million of series 2011K-3 bonds, but those bonds were not priced Thursday.

The 2011K-4 bonds are due July 1, 2035 and have a split maturity with a 3% coupon and a 5% coupon. The 2011K-5 bonds are due July 1, 2031 and also have a split maturity with a 3.5% coupon and a 5% coupon. The 2011K-6 bonds are due 2014 to 2021 with term bonds due 2037 and 2041. The serial coupons range from 3% to 5%. The 2037 bonds have a 5.375% coupon priced at par, and the 2041 bonds have a 5.375% coupon priced at 98.889.

J.P. Morgan Securities LLC was the senior manager for the bonds (Aa2/AA/AA).

Proceeds will be used to construct a 500,000-square-foot building on the hospital system's main campus; renovate and relocate its oncology department, emergency services department rooms and a new central receiving dock; construct a rehabilitation hospital; and make other renovations and repairs to Partners' facilities.

The health-care system is based in Boston.

Florida PECO bonds price

Elsewhere in pricing action, the Florida Board of Education competitively sold $154.8 million of series 2010B public education capital outlay bonds (Aa1/AAA/AAA) Thursday, said a pricing sheet.

JPMorgan won the bid.

The bonds are due 2012 to 2032 with term bonds due 2036 and 2040. Serial coupons range from 3% to 5%. The 2036 bonds have a 5% coupon priced at 97.5, and the 2040 bonds have a 5.125% coupon priced at 98.574.

Proceeds will be used to fund public education capital projects.

Dasny sells NYU hospital bonds

In other primary action, the Dormitory Authority of the State of New York priced $132.28 million of series 2011A revenue bonds for the NYU Hospitals Center, said a pricing sheet.

The bonds (Baa1/BBB+/BBB+) were sold on a negotiated basis with Morgan Stanley & Co. Inc. and Bank of America Merrill Lynch as the senior managers.

The bonds are due 2012 to 2026 with term bonds due 2031 and 2040. The serial coupons range from 3% to 5.625%. The 2031 bonds have a 5.75% coupon priced at 97.648. The 2040 bonds have a 6% coupon priced at 97.965.

Proceeds will be used to construct and renovate an existing emergency department and renovate existing space for a musculoskeletal department.

The Albany-based authority provides funding for nonprofit education, health care and other organizations throughout the state.

Upcoming offerings abound

Looking to the future of the primary market, new offerings were announced Thursday, including a large deal from the New York City Transitional Finance Authority. It is set to sell $875 million of series 2011C future tax secured subordinated bonds, according to a preliminary official statement.

Barclays Capital Inc. is the senior manager for the bonds (/AAA/).

The bonds are due 2012 to 2031 with term bonds.

Proceeds will be used to finance general capital expenditures for the city.

The authority issues bonds and notes to fund the capital needs of New York City.

Wisconsin sets deal

The week ahead looks to be more active than the past week and will be led by two major competitive offerings.

On Wednesday, the State of Wisconsin is scheduled to bring $428.74 million of series 2011A general obligation bonds.

The bonds are due 2012 to 2031, and proceeds will be used to construct, develop, expand, extend, enlarge or improve land, water, property, highways, buildings, equipment or facilities for public use.

Seattle to price

Also coming up on Wednesday, the City of Seattle will price $307.755 million of series 2011 municipal light and power improvement revenue bonds, said a preliminary official statement.

The sale includes $297.755 million of series 2011A improvement and refunding bonds and $10 million of series 2011B taxable new clean renewable energy revenue bonds.

Seattle-Northwest Securities Inc. is the financial adviser for the deal.

The 2011A bonds are due 2011 to 2026 and 2028 to 2036. The 2011B bonds are due Feb. 1, 2027.

Proceeds will be used to finance capacity and efficiency improvements to the city's Boundary Hydroelectric Project and to refund existing debt, subject to market conditions.

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