Municipals close stronger as new issues hit market; California readies $1.1 billion G.O. deal

By Sheri Kasprzak

New York, April 14 – Municipals rounded out the session Tuesday on a stronger note with yields lower by about 1 to 2 basis points across the curve, traders said.

Yields on the long end were seen lower by about 2 bps with yields on shorter maturities ending flat to about 1 bp lower.

Municipals underperformed Treasuries, which got a boost from economic data. Treasury yields were flat to 4 bps lower across the curve.

Meanwhile, a major new offering is on the horizon from California.

The state is on the calendar to price $1,101,555,000 of series 2015 general obligation bonds on April 21.

The bonds (//A+) will be sold competitively.

The offering includes $105,355,000 of series 2015 taxable G.O. bonds and $996.2 million of series 2015 tax-exempt G.O. refunding bonds.

Proceeds will be used to finance state capital expenditures and to refund existing G.O. debt.

BJC Health bonds price

Among the larger deals that priced Tuesday, the Missouri Health and Educational Facilities Authority sold $150 million of series 2015A taxable bonds for BJC Health System.

The bonds (Aa2/AA/) were sold through RBC Capital Markets LLC.

The bonds are due Jan. 1, 2045, bear interest at 4% and priced at par, according to a term sheet.

Proceeds will be used for general corporate purposes.

W. Michigan tops college deals

A few higher education offerings were in play Tuesday, led by a deal from Western Michigan University. The Broncos priced $109,135,000 of series 2015A general revenue and refunding bonds through lead manager Citigroup Global Markets Inc.

The bonds are due 2016 to 2035 with term bonds due in 2040 and 2045. The serial coupons range from 2% to 5%. The 2040 bonds have a 5% coupon and priced at 126.337, and the 2045 bonds have a 5% coupon and priced at 128.199.

Proceeds will be used to construct, equip and furnish an on-campus dining facility and an alumni center, and to refund the university’s series 2008 general revenue bonds.

Oregon sells college debt

Another college offering came from Oregon, which priced $95.89 million of series 2015 community college project G.O. bonds.

The deal includes $55,665,000 of series 2015J tax-exempt bonds, $36.58 million of series 2015K tax-exempt G.O. refunding bonds and $3,645,000 of series 2015L taxable G.O. bonds.

The 2015J bonds are due 2017 to 2039 with 5% coupons.

The 2015K bonds are due 2015 to 2037 with 2% to 4% coupons.

The 2015L bonds are due 2015 to 2017 with 0.19% to 0.70% coupons, which all priced at par.

The bonds (Aa1/AA+/AA+) were priced through senior manager J.P. Morgan Securities LLC.

Proceeds will be used to make grants to nine community college districts in the state.

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