Municipals close flat as new issues price; Fort Worth ISD brings to market $271.4 million deal

By Sheri Kasprzak

New York, March 24 – Municipals closed out another session mostly flat as a heavy slate of new deals hit the market, traders said.

Yields across the curve were unchanged as the market readied for about $9.5 billion of new supply.

For the second straight session, munis ignored rallying Treasuries, which saw yields drop by 4 to 5 basis points as expectations of low inflation created a sense that a long-awaited rate hike might be delayed until the fall.

Retail investors started gobbling up the Golden State Tobacco Securitization Corp.’s $1.7 billion refunding issue, which is scheduled to go for institutions on Wednesday.

Fort Worth ISD sells debt

Heading up Tuesday’s heavy calendar, the Fort Worth Independent School District of Texas hit the market with $271,495,000 of series 2015 unlimited tax refunding and school building bonds.

The bonds (Aaa/AAA/) were sold through J.P. Morgan Securities LLC.

The bonds are due 2016 to 2035 with a term bond due in 2040, according to a term sheet. The serial coupons range from 2% to 5%. The 2040 bonds have a 4% coupon priced at 105.307.

Proceeds will be used to refund district’s series 2005 and 2008 unlimited tax school building bonds and construct, equip, improve and renovate new and existing school facilities within the district.

Broward hospital bonds price

Elsewhere, the South Broward Hospital District of Florida sold $154,905,000 of series 2015 hospital revenue and refunding revenue bonds for the Memorial Healthcare System.

The bonds (Aa3/AA-/) were sold competitively.

The bonds are due 2016 to 2037 with term bonds due in 2040 and 2045. The serial coupons range from 3% to 5% with yields from 0.43% to 3.579%, said a pricing sheet. The 2040 bonds have a 4% coupon priced at 101.238 to yield 3.85% and the 2045 bonds have a 4% coupon priced at 100.823 to yield 3.90%.

Proceeds will be used to finance capital improvements at Memorial Regional Hospital, Joe DiMaggio Children’s Hospital, Memorial Hospital South, Memorial Hospital West, Memorial Hospital Miramar, Memorial Hospital Pembroke and Memorial Healthcare, as well as to refund all or a portion of the health care system’s series 2006 revenue bonds.

The district last sold debt for the health care system back in May of 2008 when it sold $156,575,000 of refunding bonds at yields from 2.30% to 5.205%.

Downgraded district trades

Moving to secondary action, Penn Hills School District of Pennsylvania could miss an April 1 debt payment. This news seemed to be stirring up trading activity for the district’s series 2014 G.O. bonds.

On Tuesday, the 4% 2021s were seen trading lower at 2.60% after ended Monday at 2.217%.

The district’s underlying rating was downgraded by Moody’s Investors Service to Ba3 from Baa1.

The 2014s have not traded actively since April 2014, but activity has picked up since March 20.

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