Munis Unchanged to Firmer Despite Treasuries

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The municipal market was unchanged to slightly firmer yesterday, despite Treasury market losses.

"We're continuing to get better here, mostly on demand, even though we're seeing a bit of weakness with Treasuries," a trader in New York said. "We're probably better by a basis point or two overall. Probably flat in some spots too, but the market is firmer."

The Treasury market showed losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.77%, finished at 3.82%. The yield on the two-year note was quoted near the end of the session at 2.42% after opening at 2.30%.

In the new-issue market yesterday, Morgan Stanley priced $422.1 million of senior revenue bonds for Colorado's E-470 Public Highway Authority in multiple series.

Bonds from the $53.3 million Series A-1 mature from 2008 through 2014, with term bonds in 2016, 2018, and 2024. Yields range from 2.77% with a 4% coupon in 2008 to 5.26% with a 5.5% coupon in 2024. Bonds from the $52.2 million Series A-2 mature in 2039, yielding 4.50% with a 5% coupon. Bonds from the $53.3 million Series B-1 mature from 2008 through 2014, with term bonds in 2016, 2018, and 2024. Yields range from 2.77% with a 4% coupon in 2008 to 5.26% with a 5.5% coupon in 2024. Bonds from the $52.2 million Series B-2 mature in 2039, yielding 4.50% with a 5% coupon.

Bonds from the $53.3 million Series C-1 mature from 2008 through 2014, with term bonds in 2016, 2018, and 2024. Yields range from 2.77% with a 4% coupon in 2008 to 5.26% with a 5.5% coupon in 2024. Bonds from the $52.2 million Series C-2 mature in 2039, yielding 4.75% with a 5% coupon. Bonds from the $53.4 million Series D-1 mature from 2008 through 2014, with term bonds in 2016, 2018, and 2024. Yields range from 2.77% with a 4% coupon in 2008 to 5.26% with a 5.5% coupon in 2024. Bonds from the $52.2 million Series D-2 mature in 2039, yielding 4.75% with a 5% coupon.

The bonds are insured by MBIA Insurance Corp. The underlying credit is rated Baa2 by Moody's Investors Service and BBB-minus by Standard & Poor's and Fitch Ratings.

Citi priced $371.2 million of revenue bonds for the Massachusetts Health and Educational Facilities Authority to benefit the CareGroup HealthcareSystem in two series. Bonds from the $147.3 million Series E-1 mature from 2010 through 2021, with term bonds in 2028 and 2033. Yields range from a 3.30% with a 4% coupon in 2010 to 5.36% with a 5.125% coupon in 2038. Bonds from the $224 million Series E-2 mature from 2009 through 2025, with yields ranging from 2.85% with a 5% coupon in 2009 to 5.13% with a 5.375% coupon in 2025. All bonds are callable at par in 2018. The credit is rated A3 by Moody's and BBB-plus by Standard & Poor's.

Citi also priced $130 million of revenue bonds for MassHEFA to benefit Beth Israel Hospital in multiple series. Bonds from the $4 million Series H-1 and the $4.9 million Series H-2 mature from 2008 through 2015, with yields ranging from 2.60% with a 4% coupon in 2008 to 4.15% with a 4.5% coupon in 2015. The bonds are not callable. Bonds from the $34.1 million Series B-1 and the $40 million Series B-2 mature from 2018 through 2028, with yields ranging from 4.50% priced at par in 2018 to 5.16% with a 5.375% coupon in 2028. The bonds are callable at par in 2018. And bonds from the $47 million Series D mature from 2009 through 2024, with yields ranging from 2.77% with a 4% coupon in 2009 to 4.98% with a 5.25% coupon. The bonds are callable at par in 2018. All the bonds are insured by MBIA.

Merrill Lynch & Co. priced $200 million of school facilities construction bonds for the New Jersey Economic Development Authority. The bonds mature from 2009 through 2028, with term bonds in 2033. Yields range from 2.23% with a 4% coupon in 2009 to 4.76% with a 4.75% coupon in 2033. The bonds are callable at par in 2018, and are rated A1 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch.

The Florida Department of Environmental Protection competitively sold $147.2 million of revenue bonds to Merrill Lynch with a true interest cost of 4.43%. The bonds mature from 2009 through 2028, with yields ranging from 3.18% in 2012 to 4.24% in 2020, all with 5% coupons. Bonds maturing from 2009 through 2011, and from 2021 through 2028 were not formally re-offered. Bonds maturing in 2021 and 2022 are insured by MBIA. The remaining bonds are uninsured. The bonds are callable at 101 in 2017, declining to par in 2018. The underlying credit is rated A1 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch.

Kentucky's Louisville and Jefferson County Metropolitan Sewer District competitively sold $105 million of sewer and drainage system revenue bonds to Merrill with a TIC of 4.59%. The bonds mature from 2010 through 2026, with term bonds in 2036 and 2038. None of the bonds were formally re-offered. The bonds, which are callable at par in 2018, are insured by Assured Guaranty Corp. The underlying credit is rated A2 by Moody's and AA-minus by Standard & Poor's.

Raymond James & Associatespriced $101.8 million of utility system revenue bonds for Florida's Tampa Bay Water. The bonds mature in 2034 and 2038, yielding 4.62% and 4.67%, respectively, all with 5% coupons. The bonds, which are callable at par in 2018, are rated Aa3 by Moody's, AA-plus by Standard & Poor's, and AA by Fitch.

Goldman, Sachs & Co. priced $81.5 million of hospital revenue bonds for South Carolina's CareAlliance Health Services in two series. Bonds from a $34.2 million series mature from 2010 through 2020, with a term bond in 2024. Yields range from 2.92% with a 4% coupon in 2010 to 4.61% with a 4.5% coupon in 2024. These bonds are callable at 102 in 2018, declining to par in 2020. Bonds from a $47.3 million series mature from 2009 through 2017, with yields ranging from 2.92% in 2010 to 4.01% in 2017, all with 5% coupons. Bonds maturing in 2009 will be decided via sealed bid. These bonds are not callable. The bonds are insured by Financial Security Assurance Inc., and the underlying credit is rated A3 by Moody's and A-minus by Standard & Poor's.

The economic calendar was light yesterday.

 

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