Tax-free munis strong, sellsider says; Multnomah County, Ore., hospital authority plans $230 million

By Cristal Cody and Sheri Kasprzak

New York, Aug. 18 - The week in municipals got off to a slow start, with a sluggish calendar of new issue bonds.

The trend, one sellside source said, is definitely temporary.

"We're in the middle of summer, so I wouldn't worry too much about it," he said.

"We have quite a few things coming up in the next month or so. From what I can tell, September will be a pretty busy month. There's a solid number of G.O.s in the pipeline, lots of hospitals, that kind of thing."

Meanwhile, a sellside source said Monday that professional investors moved away from mortgage-related securities and into U.S. treasuries last week.

"Tax-free municipal bonds performed strongly as manageable summertime supply and the strong U.S. Treasury market enabled underwriters to re-price new negotiated issues with lower yields," the source said in a market analysis for the week.

Multnomah County hospital bonds

Moving to upcoming offerings, the Hospital Facilities Authority of Multnomah County in Oregon expects to price $230 million conduit revenue bonds for the Mirabella at South Waterfront health care project on Aug. 25, according to a sale calendar.

The series 2008 variable-rate bonds will be sold in a negotiated sale managed by Caine Mitter & Associates.

Also ahead, the Maine Municipal Bond Bank expects to price $50 million grant anticipation bonds for the Maine Department of Transportation on Aug. 26 "if there's anything left" after a two-day retail order period that starts Friday, a source told Prospect News.

"We do quite well with retail order periods in Maine," the source said. "Also, this particular deal, it just sorts of screams retail at you, so I would expect we would do a significant portion, if not all, on Friday and Monday."

The series 2008A bonds (Aa3//AA-) have serial maturities from 2009 through 2020.

Citigroup Global Markets is the senior manager of the negotiated sale.

Proceeds will be used to help pay for three highway reconstruction projects and 12 bridge projects.

Kentucky Economic Finance Authority deal

Looking a bit farther ahead, the Kentucky Economic Development Finance Authority plans to price $343.767 million revenue bonds for the Louisville Arena Authority, according to a preliminary official statement.

The sale includes $284.435 million subseries 2008A1 fixed-rate bonds, $29.332 million subseries 2008A2 capital appreciation bonds, $15.5 million series 2008B fixed-rate bonds and $14.4 million subordinate series 2008C fixed-rate bonds.

The bonds are insured by Assured Guaranty Corp.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to develop and construct the arena for the University of Louisville men's and women's basketball programs.

Novant Health prices $195.96 million

In Monday's light pricing action, Novant Health in North Carolina priced $195.96 million variable-rate bonds with a 1.65% initial rate on Monday, though a drop in ratings from Standard & Poor's affected investors, a source told Prospect News.

The bonds (Aa3/A+/AA-) priced with a weekly interest rate through the North Carolina Medical Care Commission.

"There were three funds that did not bid on those bonds because of the split ratings, but still they were oversubscribed," the source said.

The $70 million series 2008A and $75.09 million series 2008B revenue refunding bonds, due Nov. 1, 2028, were sold in a negotiated sale managed by JPMorgan.

The $50.87 million series 2008C bonds, due May 1, 2026, were sold in a negotiated sale managed by BB&T Capital Markets.

Proceeds will be used to refund $46.74 million from the series 1996 revenue bonds, $88.03 million from the series 1998A revenue refunding bonds and $51.5 million from the series 1998B revenue bonds.

Greenville Hospital System bonds price

Also on Monday, the Greenville Hospital System in South Carolina priced $271.5 million variable-rate revenue bonds, but the initial rates were not immediately available.

The $60.615 million series 2008B, $61.22 million series 2008C, $59.605 million series 2008D and $90.095 million series 2008E bonds (Aa3) were sold through the Greenville Hospital System Board of Trustees.

Citigroup Global Markets is the senior manager of the negotiated sale. Co-managers are SunTrust Robinson Humphrey, Banc of America Securities LLC and Wachovia Securities.

Proceeds will be used to refund the series 2003A, 2003B, 2005A, 2005B and 2005C bonds.

Tarrant County sells $172.4 million

Moving to recent pricings, the Tarrant County Cultural Educational Facilities Finance Corp. of Texas priced $172.425 million in series 2008A hospital revenue bonds. The bonds were sold for the Scott and White Memorial Hospital and Scott, Sherwood and Brindley Foundation Project.

The bonds (Aa3/AA-/) were issued on a negotiated with JPMorgan as the lead manager.

The bonds are due 2009 to 2019 with term bonds due 2023, 2028 and 2031. The serials have coupons from 4% to 5% and yields from 2.33% to 4.89%. The 2023 bonds have a 5% coupon to yield 5.25%, the 2028 bonds have a 5.25% coupon to yield 5.46% and the 2031 bonds have a 5.5% coupon to yield 5.61%.

Proceeds will be used to refund the corporation's outstanding series 2000B1, 2001-1 and 2001-2 revenue bonds.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.