Municipal yields improve by up to 6 bps; Drexel University, Pa., prices $157.8 million bonds

By Sheri Kasprzak

New York, May 4 - Yields were yet again firmer, this time by as much as 6 basis points, even as supply dropped following the early pricing of the New Jersey Transportation Trust Fund's $600 million bond sale.

"We're seeing a good demand today, good trading volume," said one trader reached during the afternoon.

"Yields are lower by 6 [bps] in the middle. We're firmer by anywhere from 3 to 6 [bps] across the curve."

Meanwhile, demand for the New Jersey Transportation offering was sufficient enough for a 5 bps decrease in yields for maturities through 12 years in repricing, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"The 30-year maturity carried a 5.65% yield, providing an interesting contrast to the other major issue launched [Tuesday], Drexel University, which was priced with a lower initial yield of 5.45% in 30 years, though yields on the Drexel deal may rise with final pricing," Schankel said.

Pennsylvania Higher Educational Facilities Authority priced the $157.8 million sale of series 2011A revenue bonds for Drexel on Wednesday.

The bonds are due 2012 to 2026 with term bonds due in 2031, 2036 and 2041. Serial coupons range from 2% to 5.25%. The 2031 bonds have a 5% coupon priced at 98.508. The 2036 bonds have a 5.125% coupon priced at 97.32, and the 2041 bonds have a 5.25% coupon priced at 98.073.

Jefferies & Co. was the senior manager for the bonds (A3).

Proceeds will be used to finance improvements at Drexel's Philadelphia campus.

Ochsner Clinic bonds price

Elsewhere in primary action, the Louisiana Public Facilities Authority sold $150 million of series 2011 revenue bonds for the Ochsner Clinic Foundation, said a pricing sheet.

The bonds (Baa1//BBB+) were sold through Citigroup Global Markets Inc. and Barclays Capital Inc.

The bonds are due 2017 to 2023 with term bonds due in 2031, 2037 and 2041. The serial coupons range from 4% to 5.25%. The 2031 bonds have a split maturity with a 6.25% coupon and a 6.375% coupon. The 2037 bonds have a 6.5% coupon, and the 2041 bonds have a 6.75% coupon.

Proceeds will be used to finance and refinance costs to acquire, construct, renovate and repair hospital and health-care facilities in the state.

Monterey brings deal

Also during the session, the California Statewide Communities Development Authority sold $86.405 million of series 2011 health facilities revenue bonds (//AA-/F1+) for the Community Hospital of the Monterey Peninsula, said a pricing sheet.

Morgan Stanley & Co. Inc. was the underwriter for the offering.

The sale included $31.405 million of series 2011A bonds and $55 million of series 2011B variable-rate bonds.

The 2011A bonds are due 2012 to 2022 with term bonds due in 2026 and 2033. The serial coupons range from 3% to 5%. The 2026 bonds have a 5.375% coupon priced at 98.728. The 2033 bonds have a 6% coupon priced at 98.792.

The 2011B bonds are due June 1, 2033 and bear interest at the weekly rate.

Proceeds will be used to finance ongoing construction and renovation at the hospital's facilities and to repay a line of credit.

Miami-Dade preps offering

Looking ahead, Miami-Dade County of Florida is scheduled to sell $350.93 million of series 2011 general obligation and G.O. refunding bonds on May 17, said notices of sale.

The offering includes $196.985 million of series 2011A Building Better Communities Program G.O. bonds, $38.055 million of series 2011B parks program G.O. refunding bonds and $115.89 million of series 2011C seaport G.O. refunding bonds.

The bonds (Aa2/AA-/) will be sold competitively with Public Financial Management Inc. as the financial adviser.

The 2011A bonds are due 2012 to 2041. The 2011B bonds and the 2011C bonds are due 2011 to 2026.

Proceeds will be used to fund public infrastructure projects, like water and sewer improvements, parks and recreation facilities and public safety facilities, as well as to refund the county's series 1999 bonds.

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