Municipals close firmer but underperform Treasuries; Mesa, Ariz., and Aspirus bonds price

By Sheri Kasprzak

New York, March 27 - Municipal yields were somewhat firmer on Wednesday but just couldn't catch up to Treasuries, which rallied during the session, market sources said.

Traders said yields were improved by a basis point or two during the session, but Treasuries outperformed munis.

The bulk of the week's deals priced on Tuesday, alleviating some supply pressure Wednesday, and some recently priced bonds were bumped in trading, said a trader in the afternoon.

Mesa brings debt

Heading up the day's primary action, the City of Mesa, Ariz., came to market with $93.97 million of series 2013 excise tax revenue obligations, said a pricing sheet.

The bonds (Aa3/AA+/) were sold through BofA Merrill Lynch.

The bonds are due 2027 and 2032. The 2027 bonds have a 5% coupon and priced at 110.803, and the 2032 bonds have a 5% coupon and priced at 112.55.

Proceeds will be used to construct a spring training facility to be initially used by the Chicago Cubs and to renovate the Hohokam Stadium.

Aspirus bonds price

Elsewhere during the day, the Wisconsin Health and Educational Facilities Authority sold $90,565,000 of series 2013 revenue bonds for the Aspirus Inc. Obligated Group, said a pricing sheet.

The bonds (A2/A/) were sold through Barclays and Piper Jaffray & Co.

The bonds are due 2013 to 2030 with term bonds due in 2033, 2038 and 2043. The serial coupons range from 2% to 5%. The 2033 bonds have a 4% coupon and priced at 98.218, and the 2038 bonds have a 4% coupon and priced at 96.139. The 2043 bonds have a 4.25% coupon and priced at 98.319.

Proceeds will be used to provide loans to the Aspirus Wausau Hospital, Memorial Health Center Inc., Aspirus Grand View Hospital and Langlade Hospital; to refund the authority's series 2000 revenue bonds; and to refinance a line of credit.

Puerto Rico debt scrutinized

Looking to rating actions, agencies are putting Puerto Rico's debt under the microscope. Standard & Poor's cut the Puerto Rico Aqueduct & Sewer Authority's senior-lien revenue bonds to BB+ from BBB-.

"We also lowered by one notch, to BBB-, the rating on the authority's [debt] guaranteed by the full faith and credit pledge of the Commonwealth of Puerto Rico," wrote Theodore A. Chapman, credit analyst for S&P.

"The downgrade reflects Standard & Poor's lowering of its rating on the commonwealth's general obligation debt on March 13, 2013. We lowered that rating by one notch, based primarily on a larger-than-expected budgetary gap and the potential difficulty for the general government to achieve structure fiscal stability in the near term."

In addition to the downgrade, S&P also placed the Puerto Rico Employees Retirement System's series A-C pension funding bonds on Credit Watch negative based on the commonwealth's G.O. downgrade.

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