THURS­DAY’S YIELDS

The Bond Buyer - - Front Page -

Top-shelf mu­nic­i­pal bonds were weaker again on Thurs­day amid rip­ple ef­fects from the tax re­form news an­nounced the day prior.

The yield on the 10-year bench­mark muni gen­eral obli­ga­tion was two ba­sis points higher to 2.00% from 1.98% from on Wed­nes­day, while the 30-year GO yield in­creased one ba­sis point to 2.85% from 2.84%, ac­cord­ing to a fi­nal read of Mu­nic­i­pal Mar­ket Data’s triple-A scale.

U.S. Trea­suries were stronger on Thurs­day at the mar­ket close. The yield on the two-year Trea­sury dipped to 1.45% from 1.46%, the 10-year Trea­sury yield dropped to 2.31% from 2.33% and the yield on the 30-year Trea­sury bond fell to 2.87% from 2.89%.

On Thurs­day, the 10-year muni-to-Trea­sury ra­tio was cal­cu­lated at 86.7% com­pared with 85.9% on Wed­nes­day, while the 30-year muni-to-Trea­sury ra­tio stood at 99.3% ver­sus 99.3%, ac­cord­ing to MMD.

RBC Cap­i­tal Mar­kets re­ceived the writ­ten award for the Penn­syl­va­nia Eco­nomic De­vel­op­ment Au­thor­ity’s $436.75 mil­lion of rev­enue bonds for the Univer­sity of Pitts­burgh Med­i­cal Cen­ter on Thurs­day. The bonds were priced to yield from 0.98% with a 4% coupon in 2018 to 3.60% with a 4% coupon in 2037. A term bond in 2042 was priced to yield 3.73% with a 4% coupon and a term bond in 2047 was priced to yield 3.80% with a 4% coupon. The deal is rated A1 by Moody’s In­vestors Ser­vice, A-plus by S&P Global Rat­ings and AA-mi­nus by Fitch Rat­ings.

Mor­gan Stan­ley priced the In­dus­trial De­vel­op­ment Au­thor­ity of the County of Mari­copa, Ariz.’s $362.07 mil­lion of rev­enue bonds for Ban­ner Health. The $189.52 mil­lion of Series 2017A bonds were priced to yield 3.70% with a 4% coupon and 3.30% with a 5% coupon in a split 2041 bul­let ma­tu­rity.

The $86.275 mil­lion of Series 2017B bonds were priced to yield 1.78% with a 5% coupon in a bul­let 2048 ma­tu­rity.

The $86.275 mil­lion of Series 2017C bonds were priced to yield 2.22% with a 5% coupon in a bul­let 2024 ma­tu­rity. The deal is rated AA-mi­nus by S&P Global Rat­ings and Fitch Rat­ings.

On the com­pet­i­tive side, the Cal­i­for­nia State Pub­lic Works Board sold $202.325 mil­lion of var­i­ous lease rev­enue bonds. Wells Fargo ap­peared to have the high bid of 2.49%. The $147.685 mil­lion of 2017 Series cor­rec­tional fa­cil­i­ties bonds were priced to yield from 0.95% with a 5% coupon in 2018 to about 3.084% with a 3% coupon in 2032.

The 54.64 mil­lion of 2017 Series state prison Solano Hous­ing bonds were priced to yield from 0.95% with a 5% coupon in 2018 to about 3.084% with a 3% coupon in 2032. The deal is rated A1 by Moody’s and A-plus by S&P and Fitch Rat­ings.

Since 2007, the Cal­i­for­nia PWB has sold about $13.57 bil­lion of se­cu­ri­ties, with the most is­suance in 2009 when it sold $2.19 bil­lion. The board saw the low­est year of is­suance in 2008 when it sold $365 mil­lion. With Thurs­day’s sale, the board sold more this year than last year.

Bank of Amer­ica Mer­rill Lynch priced and repriced the South Dakota Health and Ed­u­ca­tional Fa­cil­i­ties Au­thor­ity’s $222.874 mil­lion of rev­enue re­fund­ing bonds for Avera Health. The bonds were repriced to yield from 1.09% with a 3% coupon in 2018 to 3.59% with a 4% coupon in 2037. A term bond in 2042 was priced to yield 3.77% with a 4% coupon and a term bond in 2046 was priced to yield 3.44% with a 5% coupon. The deal is rated A1 by Moody’s and AA-mi­nus by S&P.

Citi priced the Ed­mond, Ok­la­homa, pub­lic works au­thor­ity’s $167.025 mil­lion of sales tax and util­ity sys­tem rev­enue bonds. The bonds were priced to yield from 0.99% with a 4% coupon in 2018 to 3.40% with a 4% coupon in 2037. A term bond in 2042 was priced to yield 3.64% with a 3.5% coupon and 3.18% with a 5% coupon in a split ma­tu­rity. A term bond in 2047 was priced to yield 3.65% with a 4% coupon and 3.25% with a 5% coupon in a split ma­tu­rity. The deal is rated AA-mi­nus by S&P. ◽

Aaron Weitzman

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