Municipals close weaker as Treasuries slip on stronger oil; U of Texas, Tallahassee deals set

By Sheri Kasprzak

New York, Dec. 22 – Municipals closed on a softer note Tuesday, following in line with weaker Treasuries, market sources reported.

Yields on top-rated municipals rose by 2 basis points to 3 bps, outperforming but moving closely with Treasuries.

The 30-year Treasury bond yield and the 10-year benchmark note yield rose by 4 bps each as oil prices rose after hitting a slump last week.

U of Texas bonds ahead

Moving to upcoming deals, the University of Texas System is in the market with $450 million of revenue financing system bonds for after New Year’s.

The offering includes $250 million of series 2016A taxable bonds due 2046 and $200 million of series 2016B green bonds.

The bonds (Aaa/AAA/AAA) will be sold through lead manager BofA Merrill Lynch.

Proceeds will finance capital improvements and refund the system’s series A and B commercial paper notes.

Tallahassee readies deal

In other upcoming deals, the City of Tallahassee, Fla., is on tap to price $250 million of series 2016 health facilities revenue bonds for Tallahassee Memorial HealthCare Inc.

The deal includes $150 million of series 2016A bonds and $100 million of series 2016B bonds.

The bonds (Baa1) will be sold on a negotiated basis with BofA as the lead manager.

Proceeds will be used to finance or refinance the construction, acquisition, improvement and renovation of a new hospital tower and a surgical center.

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