Municipals improve with Treasuries; Ascension Health eyes $1.92 billion bond offering

By Sheri Kasprzak

New York, April 15 – Municipal bonds rounded out the session on a positive note on Friday, with yields falling as much as 2 basis points in spots, improving but underperforming stronger Treasuries, market insiders said.

Treasuries got a boost from weaker-than-expected manufacturing data, with Treasury yields falling by as much as 5 bps.

Looking ahead, about $6.5 billion of new municipal bond issues await investors in the coming week.

Ascension announces offering

Although it’s not slated for pricing this week, a massive offering is on the horizon from the Ascension Health Alliance of Missouri. The health care system announced a $1,923,465,000 offering of series 2016 revenue bonds and taxable bonds.

The deal includes $250 million of series 2016A taxable bonds, $1,097,975,000 of series 2016A-C revenue bonds and $575.49 million of series 2016D-E revenue bonds (Aa2/AA+/AA+).

All of the bonds will be sold through senior manager Morgan Stanley & Co. LLC with BofA Merrill Lynch and J.P. Morgan Securities LLC as the co-managers.

The series 2016 A-C bonds are comprised of $928,205,000 of series 2016A bonds through the Wisconsin Health and Educational Facilities Authority, $78.12 million of series 2016B bonds through the Alabama Special Care Facilities Financing Authority of Birmingham and $91.65 million of series 2016C bonds through the Alabama Special Care Facilities Financing Authority of Mobile.

The D-E bonds include $392.46 million of series 2016D bonds through Wisconsin Health and $183.03 million of series 2016E bonds through the Michigan Finance Authority.

The maturities have not been set.

Proceeds will be used to finance capital improvements to Ascension facilities

California preps deal

Headlining the coming week’s offerings, the State of California is on Tuesday’s calendar with a $1,488,795,000 sale of various purpose general obligation bonds (Aa3/AA-/A+).

The bonds will be sold competitively.

The deal includes $236,795,000 of series 2016 tax-exempt G.O. bonds, $232.2 million of series 2016 tax-exempt G.O. bonds and $1,019,800,000 of series 2016 tax-exempt G.O. refunding bonds.

Proceeds will be used to finance capital projects, to pay outstanding G.O. commercial paper notes and to current refund the state’s series 2013A highway safety, traffic reduction, air quality and port security bonds.

Louisiana G.O.s set

Also ahead this week, the State of Louisiana will price $359,295,000 of series 2016 G.O. refunding bonds.

The deal includes $283.94 million of series 2016B bonds and $75,355,000 of series 2016C taxable bonds.

The bonds (/AA/AA-) will be sold on a negotiated basis with J.P. Morgan Securities LLC as the senior manager. The co-managers are Goldman Sachs & Co., Raymond James/Morgan Keegan, Loop Capital Markets LLC and Drexel Hamilton LLC.

The 2016B bonds are due 2022 to 2029. The 2016C bonds are due 2017 to 2021.

Proceeds will be used to refund existing G.O. debt.

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