Municipal yields weaken 2 to 5 bps; Tufts Medical Center brings $196.83 million revenue bonds

By Sheri Kasprzak

New York, March 24 - Municipals were off by anywhere from 2 to 5 basis points on Thursday as supply began to trickle in and investors continued to show indifference to the new deals.

"We're slowly seeing some new issues, but there's no demand," said one trader when asked about the cause for Thursday's tumble.

"It's not really surprising. For several weeks, we've been wondering what would happen if demand continued at this rate but supply increased. The lack of supply has really been the only thing keeping us stable."

The weeks ahead will provide some larger sales from lower-rated issuers, including the long-awaited Chicago O'Hare International Airport sale of $1 billion of revenue bonds.

According to Alan Schankel, managing director with Janney Montgomery Scott LLC, the North Texas Tollway Authority is poised to come to market in early April with $1.3 billion of bonds.

Tufts brings bonds

Heading up Thursday's active primary session, the Massachusetts Development Finance Authority priced $196.825 million of series 2011I revenue bonds for Tufts Medical Center.

The bonds (/BBB/BBB) were sold through Barclays Capital Inc. and J.P. Morgan Securities LLC, said a pricing sheet.

The bonds are due 2012 to 2022 with term bonds due in 2027, 2032, 2036 and 2041. The serial coupons range from 4% to 5.5%. The 2027 bonds have a 6.25% coupon priced at par, and the 2032 bonds have a 7.25% coupon priced at 104.599. The 2036 bonds have a 6.75% coupon priced at 99.037. The 2041 bonds have a 6.875% coupon priced at 99.296.

Proceeds will be used to construct, improve and expand an acute care hospital operated by Tufts as well as other Tufts facilities and to refinance existing debt.

Tufts Medical Center is located in Boston.

Oklahoma prices water bonds

In other primary news, the Oklahoma Water Resources Board sold $141.965 million of series 2011 revolving fund revenue bonds Thursday, said a pricing sheet.

The sale included $85 million of series 2011A bonds and $56.965 million of series 2011B bonds.

The 2011A bonds are due 2012 to 2031 with 3% to 5% coupons. The 2011B bonds are due 2013 to 2031 with term bonds due in 2036, 2039 and 2042. The coupons range from 2% to 5%. The 2036 bonds have a 5.25% coupon priced at 103.129, and the 2039 bonds have a 4.75% coupon priced at 98.476. The 2042 bonds have a 4.75% coupon priced at 97.932.

Merrill Lynch was the senior manager for the offering.

Proceeds will be used to make subsidized loans to qualified government entities to construct and improve wastewater treatment and drinking water facilities.

Baylor sells revenue bonds

Also during the session, the Clifton Higher Education Finance Corp. of Texas sold $102.98 million of series 2011 tax-exempt revenue and refunding bonds for Baylor University, said a pricing sheet.

The bonds (/AA-/AA-) were sold through Barclays Capital and Merrill Lynch.

The bonds are due 2012 to 2030 with a term bond due in 2032. The serial coupons range from 3% to 5.25%. The 2032 bonds have a 5.25% coupon priced at 101.69.

Proceeds will be used to finance the construction of a new athletic-academic complex on the Baylor campus, acquire real property for the university, refund the university's series 2008B bonds and refinance the university's series A commercial paper.

The university is located in Waco.

Miami Valley completes sale

Elsewhere, Montgomery County of Ohio sold $100 million of series 2011A revenue bonds on Thursday for Miami Valley Hospital, said a pricing sheet.

The bonds (Aa3//AA-) were sold through Barclays Capital and Wells Fargo Securities LLC.

The bonds are due 2012 to 2015 and 2017 to 2023 with coupons from 2% to 5.75%.

Proceeds will be used to construct and equip a patient tower to house the hospital's cardiac and orthopedic wing as well as make renovations, improvements and additions to other hospital facilities.

The hospital is located in Dayton, which is the county seat.

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