Municipals close flat ahead of tamer $5 billion calendar; Dignity Health preps taxable sale

By Sheri Kasprzak

New York, Oct. 6 – Municipals remained mostly flat to kick off the week, market insiders said. The week’s new-issue slate will be somewhat more subdued with about $5 billion on tap.

The largest deal on the calendar this week is from Dignity Health of California, which is slated to price series 2014A taxable bonds (A3/A/A).

The health-care system will offer at least $718 million and has the option to upsize the deal up to $888 million, according to market sources.

The bonds will be offered on a negotiated basis during the week through J.P. Morgan Securities LLC and Citigroup Global Markets Inc.

Proceeds will be used to reimburse the health-care system for previous capital expenditures, fund future capital expenditures, refinance existing bonds and refinance amounts drawn on a line of credit facility.

N.J. school bonds ahead

Another major offering this week comes from the New Jersey Economic Development Authority, which is poised to price $644.06 million of school facilities construction bonds and notes (A2/A-/A-) through JPMorgan.

The deal includes $119.06 million of series 2014K Sifma index refunding notes and $525 million of series 2014UU school construction bonds.

The authority last came to market with school construction bonds in April. Those bonds are due 2032 to 2035 and have yields from 4.05% to 4.27%.

The authority plans to use proceeds from this week’s offering to finance the construction of new school facilities within the state and to refund its series 2012G school facilities construction notes.

Alachua bonds trade higher

Moving to secondary action, the Alachua County Health Facilities Authority of Florida continued to see solid secondary demand for its recently priced revenue bonds sold for Shands Teaching Hospital and Clinics.

The 4% 2044s were seen trading at a yield of 3.939% on Monday after pricing Oct. 1 at 4.15%.

The bonds were sold through senior manager BofA Merrill Lynch, and proceeds will be used to finance capital improvements, including a new cardiovascular and neuromedicine tower at the UF Health Shands Hospital in Gainesville.

Also in trading action, California’s various purpose green general obligation bonds were still sparking interest. The 3.75% 2037s were trading on Monday at 3.78% after pricing on Sept. 23 at 3.84%.

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