Municipals mostly flat ahead of holiday; University of Connecticut sells $211.64 million

By Sheri Kasprzak

New York, Nov. 23 - Municipals were largely unchanged ahead of the Thanksgiving holiday as primary and secondary market action was relatively light, said market insiders.

"Everyone's heading out early. There's not enough going on to give us any particular direction. Yields are holding pretty steady," said one trader reached in the morning.

Despite the flood of new offerings that have been making the rounds in the secondary market, activity was too light to have a real impact on the market as insiders and investors prepared for Thanksgiving feasts.

Even the week following the Thanksgiving holiday should be more sedate, with under $4 billion in new offerings scheduled to price, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"Going into the holiday period, municipal markets are quiet, and though dealers are somewhat laden with inventory of the recent new-issue bulge, a thinner calendar with under $4 billion of primary sales scheduled for next week should help," Schankel wrote.

"Relative value indicators, such as the muni-to-Treasury ratios, remain elevated with the 30-year maturity AAA benchmark yield of 3.75% standing at 130% of the like maturity Treasury at 2.88%, matching 2011 highs. Supply and demand dynamics for tax-free bonds are favorable with lower forward supply and increasing demand from December and January reinvestment flows."

UConn brings G.O. debt

Heading up Wednesday's light primary action, the University of Connecticut sold $211.64 million of series 2011 general obligation bonds, according to a pricing sheet.

The deal included $179.73 million of series 2011A G.O. bonds and $31.905 million of series 2011B G.O. refunding bonds.

The 2011A bonds are due 2012 to 2031 with coupons from 0.50% to 5%.

The 2011B bonds are due 2012 to 2021 with a term bond due in 2023. The serial coupons range from 1.8% to 5%. The 2023 bonds have a 5% coupon priced at 120.678.

The bonds (Aa2/AA/AA-) were sold through senior manager Loop Capital Markets LLC.

Proceeds will be used to fund projects under the university's infrastructure program as well as refund the university's series 2003A, 2004A and 2005A G.O. bonds.

Catholic Health prices debt

In other news, the Catholic Health Services of Long Island came to market with $245.18 million of series 2011 revenue bonds in two tranches, according to a pricing sheet.

The offering included $184.68 million of series 2011 bonds sold through the Suffolk County Economic Development Corp. and $60.5 million of series 2011 bonds sold through the Nassau County Local Economic Assistance and Financing Corp.

The Suffolk bonds are due 2013 to 2022 with a term bond due in 2028. The serial coupons range from 2.5% to 5%. The 2028 bonds have a 5% coupon priced at 101.132.

The Nassau bonds are due 2013 to 2022 with coupons from 2% to 5%.

The bonds (A3/A-/A-) were sold through Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

Proceeds will be used to reimburse the obligated group for ongoing capital expenditures, including capital improvements, renovations and equipment purchases, as well as to refund the obligated group's series 1999A Good Samaritan Hospital Medical Center, series 1999A St. Charles Hospital and Rehabilitation Center revenue bonds, series 2000A St. Catherine of Siena Medical Center revenue bonds and series 2000B Siena Village revenue bonds.

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