Municipal yields firm again as supply for the week drops; Swedish Health brings $175 million

By Sheri Kasprzak

New York, Feb. 16 - Municipals were once again firmer as the market anticipates the sale of $3.7 billion of taxable bonds from the State of Illinois next week. The sudden drop in primary market volume helped yields. Yields were seen better by 3 to 5 basis points, said one trader.

"There's been some pressure taken off of yields just by the absence of the Illinois deal," the trader noted.

"Trading has been light. It's just a situation where we were expecting more volume and then it sort of deflates."

Heading up Wednesday's primary action, the Washington Health Care Facilities Authority priced $175 million of series 2011A revenue bonds for Swedish Health Service, said a pricing sheet.

The bonds (A2//A+) were sold through Citigroup Global Markets Inc.

The bonds are due 2012 to 2021 with term bonds due 2025, 2027, 2031 and 2041. The coupons range from 3% to 5%. The 2025 bonds have a 5.625% coupon priced at 105.588, and the 2027 bonds have a 6.5% coupon priced at 103.248. The 2031 bonds have a 6.125% coupon priced at 99.12. The 2041 bonds have a split maturity with a 6.25% coupon priced at 97.198 and a 6.75% coupon priced at 102.655.

Proceeds will be used to construct, equip, acquire and remodel Swedish Health's inpatient, outpatient and administrative facilities as well as refund debt.

Swedish Health is located in Seattle.

Imperial Irrigation prices

Elsewhere during the session, the Imperial Irrigation District of California sold $78.065 million of series 2011A electric system refunding revenue bonds, said a pricing sheet.

The bonds (Aa3/A1/AA+/AA-/) were sold through Goldman Sachs & Co. and Citigroup.

The bonds are due 2012 to 2026 with term bonds due 2031 and 2041. The serial coupons range from 3% to 5.25%. The 2031 bonds have a 6.25% coupon priced at 111.975. The 2041 bonds have a 5.5% coupon priced at 95.3.

Proceeds will be used to refund the district's series A notes, which were used to finance the El Centro Unit 3 Repower Project.

Louisville & Jefferson ahead

Looking to upcoming offerings, the Louisville and Jefferson County Metropolitan District of Kentucky is expected to come to market with $226.34 million of series 2011A sewer and drainage system subordinated bond anticipation notes on Feb. 23, said a preliminary official statement.

The BANs (MIG 1/SP-1+/F1+) will be sold competitively with First American Municipals Inc. as the financial adviser.

The BANs are due March 1, 2012.

Proceeds will be used to pay and retire the district's series 2010A sewer and drainage system subordinated BANs, which were issued to refund the district's series 1999A sewer and drainage system revenue bonds.

Pennsylvania housing to price

Also ahead, the Pennsylvania Housing Finance Agency is expected to price $158.84 million of series 2011-112 mortgage revenue bonds, said a preliminary official statement.

The bonds will be sold on a negotiated basis with Bank of America Merrill Lynch and RBC Capital Markets LLC as the senior managers.

The bonds are due 2011 to 2022 with term bonds due 2025 and 2028.

Proceeds will be used to fund mortgage loans.

In addition, the agency intends to convert $238.26 million of series 2009-107C non-AMT bonds. The bonds, which are due Oct. 1, 2041 and bear interest at the term rate, will convert to the short-term rate on March 24 through May 24.

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