Municipal yields end Friday ahead of Labor Day slightly lower; Chicago, Dasny prepare deals

By Sheri Kasprzak

New York, Aug. 31 - Municipals rounded out the week on a quiet note. Bonds around 10 years firmed somewhat in concert with Treasuries. No major offerings priced, and there was very little secondary action to speak of, traders reported.

Ten-year bonds were seen about 1 basis point lower Friday in tandem with Treasuries after Federal Reserve Chairman Ben Bernanke announced that bond buying could be a way to reduce unemployment during his speech to central bankers at Jackson Hole, Wyo.

The week ahead for municipals will prove to be almost as slow as this week. Just $3 billion of new issues are expected once the market cranks back up after Labor Day on Monday, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

Chicago to price $300 million

The largest offering of the week ahead will come from the City of Chicago, which plans to price $300 million of series 2012 senior-lien wastewater transmission revenue bonds (/A+/AA) through Ramirez & Co. Inc.

The city intends to use the proceeds to finance capital improvements and extensions to the sewer system.

Another major offering comes from the Dormitory Authority of the State of New York, which is expected to sell $238 million of series 2012A lease revenue bonds (Aa2/AA-/) through Ramirez and Jefferies & Co. Inc.

Those bonds will be used to finance the construction of dormitory facilities at various state universities and to refund existing debt.

Sanger brings bonds

In primary action during the week, the Sanger Industrial Development Corp. of Texas sold $186.54 million of series 2012B revenue bonds for the Texas Pellets project on Wednesday, said a pricing sheet.

The bonds were sold through Raymond James/Morgan Keegan.

The bonds are due July 1, 2038. They have a 7.5% coupon and an 8% coupon, both of which priced at par.

Proceeds will be used to finance the design and construction of a solid waste disposal facility in Woodville, Texas, that produces biomass pellets used in energy production and a five-silo storage facility in Port Arthur, Texas.

S&P upgrades OhioHealth

In ratings news, Standard & Poor's upgraded OhioHealth to AA+ from AA.

"As ratification of the bigger is better theme in nonprofit health care, S&P raised its rating on OhioHealth to AA+ from AA, citing a high level of operating performance and 42% market share in the Columbus region," Schankel said Friday.

"With about $2.2 billion of annual revenue, the six-hospital system generating an operating margin of nearly 7% in FY 2011."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.