Muni yields fall by 1 bp to 2 bps as market digests unemployment report; UnityPoint prices

By Sheri Kasprzak

New York, May 6 - Municipals were improved on the day, keeping mostly in line with Treasuries, as investors started returning after the dust kicked up by last week's unemployment numbers settled, market insiders said.

Although the unemployment rate fell to 6.3%, many insiders noted not long after that this wasn't the whole picture.

After the numbers were released, one market insider pointed out that there were many caveats in the April jobs report and that the Fed is still looking to dive into its own analysis.

Both short munis and longer bond yields were down by 2 basis points on the day, and yields in the middle were seen lower by a basis point.

Munis followed Treasuries closely. The 30-year Treasury bond yield fell by 3 bps to 3.38%, and the 10-year note yield fell by 2 bps following the auction of $29 billion of three-year notes at a high yield 0.928%.

Moody's cuts Miami-Dade

In ratings action, Moody's Investors Service cut the rating of Miami-Dade County, Fla.'s seaport revenue debt to Baa1 from A3.

The cut comes just as the county is preparing to price $208.13 million of series 2014 variable-rate demand seaport revenue bonds through Barclays.

"As the world's largest passenger cruise port, Miami-Dade generates 46% of operating revenue from cruise wharfage and dockage fees, with another 37% derived from cargo operations and the remainder coming from rentals, parking and transportation," wrote Alan Schankel, managing director with Janney Montgomery Scott LLC.

Moody's chose to downgrade the county's seaport debt based on increasing leverage from bonds issued to finance the port's five-year, $1 billion capital program.

The upcoming deal will finance seaport improvements, passenger terminal improvements and bulkhead, roadway and bridge improvements, among other capital improvements.

The downgrade impacts $700 million of outstanding debt.

UnityPoint brings debt

Moving to the day's pricing action, UnityPoint Health sold $162.9 million of series 2014 health facilities revenue bonds through the Wisconsin Health and Educational Facilities Authority and the Iowa Finance Authority.

The deal included $93,095,000 of series 2014A bonds through Wisconsin Health and $69,805,000 of series 2014C bonds through Iowa Finance, said a pricing sheet.

The 2014A bonds are due 2014 to 2029 with 1% to 5% coupons. The 2014C bonds are due 2030 to 2035 with 4% to 5% coupons.

The bonds (Aa3/P-1//AA-/F1+) were sold through J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

Proceeds will be used to refinance the debt of Meriter Health Services Inc. and refund the authority's series 2005A bonds.

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