Municipals weaken along with Treasuries; University of Minnesota sells $335.27 million bonds

By Sheri Kasprzak

New York, Feb. 1 - Municipal yields were slightly off on Tuesday as Treasuries took a tumble, but the change wasn't enough to panic some traders.

"It's a touch off," noted one trader reached during the session. "We're following along with some weakness in Treasuries, but it's not that big of a deal. If we're off at all, it's a basis point or two."

The weakness comes after more than a week of firmness, and that's thanks in part to a sparser primary calendar, noted Alan Schankel, managing director with Janney Montgomery Scott LLC.

"The price stability of the past week or so will be challenged if volume picks up," Schankel said.

Fortunately, that's not an issue for the week. The two largest sales of the week are coming up on Wednesday. The New York City Transitional Finance Authority will head the lineup with its $875 million sale of series 2011D future tax secured bonds via Goldman Sachs & Co. The State of North Carolina will round out the big deals with its $500 million competitive offering of series 2011A limited obligation bonds.

The largest sale of the week, almost $1 billion of bonds for the Chicago O'Hare International Airport offered through the City of Chicago, has been grounded amid legal grumblings from United Air Lines and American Airlines.

U of Minnesota bonds price

Looking to Tuesday's primary action, the University of Minnesota priced $335.27 million of series 2011A general obligation bonds, said a pricing sheet.

The bonds are due 2011 to 2031 with a term bond due in 2036. The serial coupons range from 2% to 5.5%. The 2036 bonds have a 5% coupon priced at par.

Barclays Capital Inc. was the senior manager.

Proceeds will be used to purchase and improve land and buildings, construct and equip campus facilities and make other campus improvements.

The university's main campus is in Minneapolis and St. Paul.

ProMedica brings bonds

Also during the day, the ProMedica Healthcare Obligated Group of Ohio sold $199.455 million of series 2011 revenue and revenue refunding bonds in two offerings, said pricing sheets. The amount was downsized from $270.655 million.

The deals included $182.155 million of series 2011A hospital revenue bonds sold through Lucas County, Ohio, and $17.3 million of series 2011B hospital revenue refunding bonds sold through the Lenawee County Hospital Finance Authority of Michigan.

The bonds (Aa3/AA-/) were sold through Barclays Capital Inc. and Wells Fargo Securities LLC.

The 2011A bonds are due 2015 to 2023 with term bonds due 2031, 2037 and 2041. The serial coupons range from 3% to 5%. The 2031 bonds have a 5.75% coupon priced at 97.274, and the 2037 bonds have a 6.5% coupon priced at 103.911. The 2041 bonds have a split maturity with a 6% coupon priced at 96.988 and a 6.2% coupon priced at 99.715.

The 2011B bonds are due 2016 to 2019 with a term bond due in 2035. The serial coupons range from 3.25% to 4.375%. The 2035 bonds have a 6% coupon priced at 96.859.

Proceeds will be used to construct a 51,000-square-foot replacement hospital for Toledo Hospital, complete a 75,000-square-foot orthopedic center at the Wildwood Medical Center and make other renovations to ProMedica facilities.

The health-care group is based in Toledo, Ohio.

Memphis sale to fly

Looking out on the horizon, the Memphis-Shelby County Airport Authority of Tennessee is set to sell $111 million of series 2011 refunding revenue bonds, said a preliminary official statement.

The offering includes $96 million of series 2011A AMT bonds and $15 million of series 2011B non-AMT bonds.

The bonds (A2/A-/A+) will be sold on a negotiated basis with Morgan Keegan & Co. Inc. as the senior manager.

Proceeds will be used to refund the airport authority's series 1999D and 2001A bonds.

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