Munis rally, yields drop 5 bps to 8 bps; Illinois Finance Authority to sell health-care bonds

By Cristal Cody

Tupelo, Miss., Sept. 6 - Municipal bonds continued to trade strong, sending yields down on the longer end of the curve on light issuance Tuesday after markets returned from the Labor Day holiday.

"The Treasury market rallied early today and into this afternoon held on. There's not a lot of issuance today, and it's been a continuation of the rally we've seen over the last couple of weeks," a municipal bond trader said. "Yields dropped anywhere from 5 to 8 basis points today in 10 years on out."

No major bond deals were seen pricing on Tuesday, a bond source said.

The New York State Thruway Authority is expected to sell $350 million of series 2011A state personal income tax revenue bonds through a negotiated sale, but no negotiated deals were seen on Tuesday, the source said.

With Monday being a holiday, light issuance is "expected to continue throughout the week," the source said.

Illinois Finance to price

One new offering is in the works from the Illinois Finance Authority, which announced a $114.575 million three-tranche bond sale (Aa2/AA/AA) for Advocate Health Care, according to preliminary official statements.

The authority will offer $12.325 million of series 2011A1 revenue bonds with serial maturities from 2012 through 2022 and $32.25 million of series 2011A2 revenue bonds due April 1, 2041.

The last tranche of $70 million is an offering of series 2011B revenue bonds due April 1, 2051.

Citigroup Global Markets Inc. is the lead manager of the negotiated sales. Loop Capital Markets LLC and Cabrera Capital Markets, LLC are co-managers on the sale of the series 2011A bonds.

Proceeds of the bonds will be used to refund the outstanding Illinois Health Facilities Authority series 1998A and 1998B revenue bonds for Advocate Health Care and to finance, refinance and reimburse a portion of the costs to acquire, construct, renovate and equip a nine-story ambulatory care facility at Advocate Christ Medical Center.

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