Illinois leads pricing action with $800 million offering of G.O. bonds; muni yields end flat

By Cristal Cody

Tupelo, Miss., April 2 - The State of Illinois led municipal bond market action on Tuesday with an $800 million offering of general obligation bonds in an otherwise quiet session ahead of key labor data, market sources said.

Illinois' bonds were "doing pretty well" in secondary trading, but it was a "very, very quiet market," a trader said. "Yields are unchanged from yesterday."

Market participants are focused on upcoming employment data from the Labor Department, which will release the March non-farm payroll report on Friday, one source said.

"That's kind of what everyone is sitting around waiting for," the source said. "It's a very selective market. The calendar is relatively manageable; there's just not a whole lot."

The Commonwealth of Pennsylvania is set to price $950 million of first series of 2013 general obligation bonds due 2014 through 2033 via a competitive sale on Wednesday in the week's last major offering, sources said.

Public Financial Management Inc. is the financial advisor.

Proceeds will be used for capital facilities projects and to make loans for public improvements.

Illinois prices $800 million

Illinois priced $800 million of series of April 2013 general obligation bonds (A2//A), which included $450 million of series of April 2013A bonds and $350 million of series of April 2013B bonds with serial maturities from 2014 through 2038, state and market sources said.

BofA Merrill Lynch was the winning bidder on both tranches in the competitive sale with a bid of 3.92% on the series 2013A bonds and a bid of 4.97% on the series 2013B bonds, according to the Illinois Governor's Office of Management and Budget.

Public Resources Advisory Group was the financial adviser.

Proceeds will be used to finance capital projects within the state.

Nevada plans $131.44 million

The deal pipeline includes $131.44 million of highway revenue motor vehicle series 2013 refunding bonds that the State of Nevada plans to price via a competitive sale on April 10, according to a preliminary official statement.

The bonds (Aa2/AA+/AA+) have serial maturities from 2016 through 2023.

JNA Consulting Group, LLC and Montague DeRose and Associates LLC are the financial advisors.

Proceeds will be used to refund all or a portion of the state's series 2005 and series 2006 highway improvement revenue motor vehicle fuel tax bonds.

Boston University plans deal

In other new deals planned, Massachusetts Development Finance Agency intends to price $110 million of revenue bonds for Boston University.

The series 2013X bonds (A1/A/) are due Oct. 1, 2048.

J.P. Morgan Securities LLC and Barclays will manage the negotiated offering.

Proceeds will be used to finance and refinance capital projects, including renovations to the law school and construction of a new student residence hall for graduate medical students.

Sutter to price $300 million

In California, Sutter Health plans to price $300 million of taxable bonds as part of a total $750 million financing plan, according to a preliminary offering memorandum.

The taxable bond offering includes $100 million of series 2013A bonds, $100 million of series 2013B bonds and $100 million of series 2013C bonds.

Morgan Stanley & Co. LLC and BofA Merrill Lynch are the lead managers of the negotiated sale.

Sutter Securities Inc. is the co-manager.

Proceeds will be used to finance capital projects, including reimbursement for prior capital expenditures.

The deal is expected to close on April 24.

Sutter Health revenue bond

As part of the refinancing plan, California Health Facilities Financing Authority intends to bring $450 million of revenue bonds for Sutter Health, according to a preliminary offering memorandum.

Morgan Stanley and BofA Merrill Lynch are the lead managers of the negotiated sale.

Sutter Securities Inc. is the co-manager.

Proceeds will be used to finance the costs to construct, renovate and equip health care facilities.

The deal is expected to close on April 24.

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