Municipals hold steady as new issue action heats up; Trinity Health sells $552.8 million deal

By Sheri Kasprzak

New York, Jan. 13 – Municipals ignored a Treasuries rally Wednesday, closing mostly flat, traders reported.

The yield on the triple-A 10-year bond was 1.90%, and the 30-year bond yield was at 2.83%.

Meanwhile, a crude oil price drop and continued weakness for stocks sent Treasuries into another rally with the 30-year bond and 10-year note yields falling 4 basis points.

Trinity Health brings debt

The day was filled with health care offerings, led by Trinity Health Credit Group, which sold $552,805,000 of composite issue revenue bonds.

The offering was comprised of $218.47 million of series 2016CT revenue bonds through the Connecticut Health and Educational Facilities Authority, $22,985,000 of series 2016ID revenue bonds through the Idaho Health Facilities Authority, $41.86 million of series 2016MD revenue bonds through Montgomery County, Md., and $269.49 million of series 2016MI revenue refunding bonds through the Michigan Finance Authority.

The 2016CT bonds are due 2017 to 2036 with term bonds due in 2041 and 2045. The serial coupons range from 2% to 5%. The 2041 bonds have a 3.5% coupon priced at 96.849 and a 5% coupon priced at 115.269. The 2045 bonds have a 5% coupon priced at 114.795.

The 2016ID bonds are due Dec. 1, 2045 and have a 4% coupon priced at 103.251 and a 5% coupon priced at 116.032.

The 2016MD bonds are due Dec. 1, 2045 and have a 5% coupon priced at 116.512.

The 2016MI bonds are due 2017 to 2037 with term bonds due in 2041 and 2045. The serial coupons range from 3% to 5%. The 2041 bonds have a 5.25% coupon priced at 117.354. The 2045 bonds have a 4% coupon priced at 101.693 and a 5% coupon priced at 114.323.

The bonds (Aa3/AA-/AA) were sold through BofA Merrill Lynch and Goldman Sachs & Co.

Proceeds will be used to construct, equip, improve and renovate Trinity Health facilities.

Sutter bonds price

Elsewhere, the California Health Facilities Financing Authority priced $475,445,000 of series 2016A revenue bonds for Sutter Health. The deal was downsized from $500 million.

The bonds (Aa3/AA-/AA-) were sold via Morgan Stanley & Co. LLC.

The bonds are due 2021 to 2036 with term bonds due in 2041 and 2046. The serial coupons range from 3.25% to 5% with yields from 1.24% to 3.4%. The 2041 bonds have a 5% coupon priced at 116.107 to yield 3.08%, and the 2046 bonds have a 5% coupon priced at 115.558 to yield 3.14%.

Proceeds will be used to construct a new replacement hospital at Van Ness Avenue and Geary Boulevard in San Francisco, a new replacement hospital for St. Luke’s Hospital in San Francisco and a replacement hospital for Sutter Santa Rosa Regional Hospital.

Beaumont sells bonds

In other health care deals, the Michigan Finance Authority sold $300 million of series 2016A hospital revenue bonds for Beaumont Health Credit Group.

The bonds (A1/A/) were sold through senior manager Morgan Stanley.

The bonds are due in 2044 and 2046. The 2044 bonds have a 5% coupon priced at 112.023 to yield 3.53%, and the 2046 bonds have a 4% coupon priced at 99.12 to yield 4.05%.

Proceeds will be used to renovate and expand facilities operated by the credit group.

Nevada Higher Education

During the session, Jamie Hullman, director of finance for the Nevada System of Higher Education, ran through some details on its $61,345,000 offering of certificates of participation.

Baird & Co. Inc. won the bid for the deal, Hullman said, at a 3.27377% true interest cost.

The certificates (//AA) are due 2017 to 2044 with a term bond due in 2046. The serial coupons range from 2% to 5% with 0.8% to 3.64% yields. The 2046 bonds have a 3.5% coupon priced at 97.256 to yield 3.65%.

In a short interview Wednesday, Hullman said the system isn’t required to sell its debt competitively.

“The competitive bid process is our standard method [but] NSHE is not required to sell debt in this manner,” he said.

“Market conditions were not a factor [in its decision to sell competitively].”

Proceeds will be used to finance capital improvements to the University of Nevada at Reno campus and refund some of the system’s outstanding obligations.

The refunding will provide a present value savings of $2,112,234.

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