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Municipals end weaker with Treasuries; University of California brings $1.05 billion bonds
By Sheri Kasprzak
New York, Aug. 11 – Municipals ended a more-subdued session on a weaker note as Treasuries got punched by higher oil prices, market insiders said.
The 10-year triple-A muni bond yield climbed 5 basis points to 1.50%, and the 30-year bond yield rose 3 bps to 2.33%.
Meanwhile, Treasuries battled rising oil prices. Crude oil rose $1.66 on Thursday to end at $43.37 per barrel. The 10-year benchmark Treasury note yield rose 7 bps to close at 1.57%, and the 30-year bond yield rounded out the day 5 bps higher at 2.28%. The five-year note yield jumped 9 bps to 1.16%, and the two-year yield rose 7 bps to 0.76%.
University bonds hit market
Moving to the new-issue calendar, the University of California priced one of the last substantial deals of the week. It sold $1,046,440,000 of series 2016 medical center pooled revenue bonds. The deal was downsized from $1,048,850,000.
The deal included $873.08 million of series 2016L tax-exempt bonds and $173.36 million of series 2016M taxable bonds.
The 2016L bonds are due 2017 to 2038 with term bonds due in 2041, 2042, 2044 and 2047. The serial coupons range from 1.75% to 5%. The 2041 bonds have a 5% coupon priced at 122.662, and the 2042 bonds have a 3% coupon priced at 99.25. The 2044 bonds have a 4% coupon priced at 110.979, and the 2047 bonds have a 5% coupon priced at 122.176.
The 2016M bonds are due 2017 to 2031 with term bonds due in 2036 and 2047. The serial coupons range from 0.74% to 2.959%, all priced at par. The 2036 bonds have a 3.29% coupon priced at par, and the 2047 bonds have a 3.49% coupon priced at 103.846.
The bonds (Aa3/AA-/AA-) were sold through senior managers Barclays, J.P. Morgan Securities LLC and Siebert Brandford Shank & Co. LLC.
Proceeds will be used to finance capital projects at the UC Davis Medical Center, UC Irvine Medical Center, UCLA Medical Center and the UC San Diego Medical Center.
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