Municipals end day weaker as Treasuries drop on FOMC meeting; Dasny brings health-care bonds

By Sheri Kasprzak

New York, April 29 – Municipals wrapped up the day on a weaker note again Wednesday as the Federal Open Market Committee chose to hold rates steady at their April meeting, market insiders said.

Yields on top-rated munis were higher by as much as 5 basis points as Treasuries sank too. The 30-year Treasury bond yield rose by 8 bps, and the 10-year yield climbed by 6 bps.

Coming up Thursday, the largest offering of the week is slated to hit the market. Massachusetts is on tap to price $550 million of general obligation bonds (Aa1/AA+/AA+) in a competitive deal.

The deal includes $100 million of 2015A bonds and $450 million of series 2015B bonds.

The commonwealth intends to use the proceeds to fund capital expenditures.

The competitive sale is the biggest deal in a week with just over $5 billion of supply expected. The previous week saw about double that.

Dasny brings bonds

Heading up Wednesday’s light primary activity, the Dormitory Authority of the State of New York offered up $68.9 million of series 2015 revenue bonds for the Orange Regional Medical Center.

The bonds (Ba1//BB+) were sold through J.P. Morgan Securities LLC and BofA Merrill Lynch.

The bonds are due 2016 to 2035 with term bonds due in 2040 and 2045, according to a term sheet. The serial bonds have 5% coupons. The 2040 bonds have a 5% coupon and priced at104.415, and the 2045 bonds have a 5% coupon and priced at 104.004.

Proceeds will be used to finance a new cancer center and a parking facility for the medical center.

Louisiana universities stressed

Looking to bankruptcy news, Louisiana’s public universities are experiencing stress as a $1.6 billion budget gap has led to a proposed reduction in aid to the higher education facilities. That cut could be to the tune of $200 million.

Just last week, Louisiana State University was forced to cancel its $114.48 million auxiliary revenue and refunding bonds (A1/AA-/) after university officials announced these proposed reductions might force the university into the college equivalent of a bankruptcy plan.

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