Municipals end session stronger as Fed holds rates steady; Presence Health brings $1 billion

By Sheri Kasprzak

New York, July 27 – Municipals rounded out the session on a positive note after the Federal Open Market Committee elected to hold interest rates steady, market sources said.

The 10-year triple-A muni bond yield fell by 3 basis points to 1.45%, and the 30-year bond yield fell 3 bps to 2.26%.

Meanwhile, the 30-year Treasury bond and 10-year note yields fell by 5 bps each to 2.23% and 1.52%, respectively. The five-year note yield also ended the session 5 bps lower at 1.10%, and the two-year note yield edged 2 bps lower to 0.73%.

Presence Health brings debt

Moving to the active new-issue market, the Illinois Finance Authority sold $1,003,585,000 of series 2016C revenue bonds for the Presence Health Network. The deal was upsized from $967,385,000.

The bonds (Baa3/BBB-/BBB) were sold through J.P. Morgan Securities LLC.

The bonds are due 2020 to 2034 with term bonds due in 2036 and 2041. The serial coupons range from 3.625% to 5%. The 2036 bonds have a 4% coupon that priced at 99.074 and a 5% coupon that priced at 112.148.

Proceeds will be used to refund the health network’s series 1999A-B, 2009, 2009A, 2010A and 2016A revenue bonds.

Sutter Health sells bonds

In other health-care issues, the California Health Facilities Financing Authority sold $848.72 million of series 2016 revenue and refunding bonds for Sutter Health. The deal was downsized from $850 million.

The deal included $748.72 million of series 2016B refunding revenue bonds and $100 million of series 2016C revenue bonds.

The 2016B bonds are due 2023 to 2036 with term bonds due in 2038, 2041 and 2046. The serial bonds have 5% coupons. The 2038 bonds have a 4% coupon and priced at 111.279, the 2041 bonds have a 4% coupon and priced at 110.996, and the 2046 bonds have a 5% coupon and priced at 122.772.

The 2016C bonds are due Aug. 15, 2053 with a 1% coupon and priced at par.

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

Proceeds will be used to refund the authority’s series 2007A revenue bonds and to construct a new hospital at Van Ness Avenue and Geary Boulevard and a new hospital adjacent to St. Luke’s Hospital, both in San Francisco.

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