Munis firm as new issues continue to see good reception; Missouri Health sells $250 million

By Sheri Kasprzak

New York, Nov. 28 - Municipal yields were firmer again on Wednesday as new offerings continued to see strong investor interest. Many new offerings were seen repricing with much lower bids, market insiders reported.

"Higher-grade names are definitely firmer throughout the curve, and a lot of new deals are getting bumped," said a trader in the afternoon.

"There are some aggressive bids out today. We expect that demand will continue to be solid throughout December until the holiday season."

Supply will continue to remain strong, according to Alan Schankel, managing director with Janney Montgomery Scott LLC. Thirty-day visible supply is at $11.5 billion, said Schankel Wednesday, with about $5 billion already scheduled for the coming week.

Mercy Health, Lehigh price

In new offerings, two major deals came out of the health care sector. The Missouri Health and Educational Facilities Authority sold $250 million of series 2012 health facilities revenue bonds for Mercy Health. The Lehigh County General Purpose Authority came to market with $152,745,000 of series 2012B hospital revenue bonds for Lehigh Valley Health Network.

"Health care issues including $250 million Mercy Health, Mo., and $152 million Lehigh Valley Health Network were priced and repriced with yields adjusted lower by as much as 10 basis points," said Schankel.

Mercy brings $250 million

The $250 million Mercy Health bonds were sold through Bank of America Merrill Lynch and Barclays.

The bonds are due 2019 to 2023 with term bonds due in 2039 and 2042. The serial bonds have 3% coupons. The 2039 bonds have a 3.75% coupon priced at 98.826 and the 2042 bonds have a 4% coupon priced at 105.396.

Proceeds will be used to construct a new hospital in Joplin, Mo., to replace St. John's Mercy Hospital, acquire real property for hospital facilities, and relocate and renovate the labor and delivery unit at Mercy Hospital St. Louis.

Lehigh sells debt

Also during the session, the Lehigh County General Purpose Authority of Pennsylvania sold $152,745,000 of series 2012B hospital revenue bonds for the Lehigh Valley Health Network, said a pricing sheet.

The bonds (A1/A+/) were sold through Bank of America Merrill Lynch and Wells Fargo Securities LLC.

The bonds are due 2013 to 2027 with term bonds due in 2032, 2033, 2037 and 2043. The serial coupons range from 2% to 4%. The 2032 bonds have a 3.25% coupon priced at 97.171. The 2033 bonds have a split maturity with a 3.7% coupon priced at par and a 4% coupon to yield 3.53%. The 2037 bonds have a 3.75% coupon priced at 99.046 and the 2043 bonds have a 4% coupon to yield 3.83%.

Proceeds will be used to finance or reimburse the authority for capital improvements, renovations and improvements to Lehigh Valley facilities, as well as current refund the health network's series 2001B bonds and advance refund its series 2003A bonds.

Puyallup deal prices

In other offerings, the Puyallup School District No. 3 of Washington State came to market Wednesday with $78,595,000 of series 2012A unlimited tax general obligation refunding bonds, said a pricing sheet.

The bonds (Aa2/AA/) were sold competitively with J.P. Morgan Securities LLC winning the bid, said Brian Fox, a spokesman for the district.

The bonds are due 2013 and 2016 to 2025 with 4% to 5% coupons.

Proceeds will be used to advance refund the district's series 2005 G.O. bonds.

"Given favorable bond market conditions and historically low interest rates, the district will for the second time this year refinance a portion of the school bonds voters approved in 2004 for a combined savings to taxpayers of more than $23 million over the next 13 years," said a statement released by the district Wednesday.

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