Municipals improve along with rallying Treasuries; Kentucky Property prices revenue bonds

By Sheri Kasprzak

New York, Jan. 28 – Municipals rallied along with Treasuries Wednesday after the Federal Open Market Committee’s January meeting wrapped up and Federal Reserve Chairwoman Janet Yellen released statements that an interest rate hike could occur at one of the committee’s off-quarter meetings.

Yields on munis were lower by 6 to 8 basis points during the day, underperforming Treasuries. The 30-year Treasury bond yield dropped by 11 bps, and the 10-year note yield fell by 10 bps.

Meanwhile, some of the last large deals of the week priced, led by the Kentucky State Property and Buildings Commission’s $368,845,000 offering of revenue bonds.

Kentucky deal prices

That Kentucky offering included $132,095,000 of series 2015A Project No. 108 revenue bonds and $254.75 million of series 2015B Project No. 108 revenue refunding bonds.

The 2015A bonds are due 2015 to 2034 with 2% to 5% coupons.

The 2015B bonds are due 2015 to 2026 with 2% to 5% coupons.

The bonds (Aa3/A+/) were sold through senior managers Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used to refund the commission’s series 2005 Kentucky Asset/Liability Commission project notes.

San Francisco sells debt

Elsewhere during the day, the City and County of San Francisco hit the market with $293.91 million of series 2015R-1 general obligation refunding bonds. The offering was upsized from $289.21 million.

The bonds (Aa1/AA+/AA+) were sold competitively, but the issuer did not immediately return calls for the winning bidder.

The bonds are due 2015 to 2030 with 2% to 5% coupons and 0.08% to 2.59% yields, said a pricing sheet.

Proceeds will be used to refund the city and county’s series 2006R-1, 2006R-2, 2008A-B, 2008R-3, 2009A and 2010E G.O. bonds.

Trinity bonds ahead

Looking to upcoming offerings, the Trinity Health Credit Group announced plans Wednesday to price $961.43 million revenue bonds in a composite issue.

The deal includes $640.63 million of series 2015MI hospital revenue and refunding bonds through the Michigan Finance Authority, $169.74 million of series 2015ID revenue bonds through the Idaho Health Facilities Authority and $151.06 million of series 2015MD revenue bonds through Montgomery County, Md., according to a preliminary official statement.

The bonds (Aa3) will be sold through BofA Merrill Lynch and Goldman Sachs & Co.

Proceeds will be used to finance capital improvements to Trinity Health facilities as well as to refund existing bonds.

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