Municipals continue to lose ground; short bonds weaken most; St. Joseph Health bonds price

By Sheri Kasprzak

New York, July 10 - Municipal yields were weaker again on Wednesday, market sources said. New issues were pricing and then cut, insiders reported.

"Inside of 10 years, yields are up maybe 4 to 5 basis points," a trader said in the afternoon.

Bids-wanted were reported well above $1 billion as mutual funds continued to shed their muni holdings.

Long bonds held steady even after gaining 5 bps on Tuesday.

St. Joseph Health prices debt

In primary action, the California Health Facilities Financing Authority sold $331.53 million of series 2013A revenue bonds for the St. Joseph Health System, said a pricing sheet.

The bonds (A1/AA-/AA-) were sold through Morgan Stanley & Co. LLC.

The bonds are due 2021 to 2029 with term bonds due in 2033 and 2037. The serial coupons range from 4% to 5%. The 2033 bonds have a 5% coupon and priced at 100.229, and the 2037 bonds have a 5% coupon and priced at 99.306.

Yields on the bonds cheapened after initial pricing, said a market source Wednesday.

Proceeds will be used to construct, equip, acquire, renovate and remodel the Hoag Hospital Newport Beach, St. Joseph Hospital, St. Jude Medical Center, St. Mary Medical Center and Santa Rosa Memorial Hospital.

Tarrant brings two deals

In other action, the Tarrant County Cultural Education Facilities Finance Corp. of Texas came to market with two health-care offerings.

The corporation sold $188.54 million of series 2013 hospital revenue bonds (Aa3/AA-/) for the Methodist Hospitals of Dallas and $68.95 million of series 2013A hospital revenue bonds for Cook Children's Medical Center.

The Methodist Hospitals bonds were priced through BofA Merrill Lynch and are due 2014 to 2029 with term bonds due in 2031, 2038, 2040 and 2043.The serial coupons range from 2% to 5%. The 2031 bonds have a 4.5% coupon priced at 98.166 and a 5.25% coupon that was not reoffered. The 2038 bonds have a 4.75% coupon priced at 98.548. The 2040 bonds have a 4.75% coupon priced at 97.606. The 2043 bonds have a 5% coupon priced at 98.764 and a 5.25% coupon that was not reoffered.

Proceeds will be used to construct a new six-floor trauma/critical-care tower at the Methodist Dallas as well as new operating rooms and other hospital facilities.

In the Cook Children's Medical Center deal, the bonds (Aa2/AA/) were sold through senior managers J.P. Morgan Securities LLC and Goldman Sachs & Co.

The bonds are due Dec. 1, 2039, have a 5.25% coupon and priced at 103.296.

Proceeds will be used to refund the center's series 2010B-C revenue bonds.

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