University of Pittsburgh Medical Center completes initial tender offer on auction-rate bonds

By Sheri Kasprzak

New York, Feb. 21 - The University of Pittsburgh Medical Center tendered for some of its auction-rate bonds in response to the current auction-rate crisis.

"The current turmoil in the auction-rate bond market and resulting spike in interest rates prompted UPMC to offer to purchase certain of its auction bonds from investors at a price of 100.01% of par on any business day up until March 19, 2008," said a statement released by University of Pittsburgh Medical Center Thursday.

"UPMC is pleased with the results of the tender program thus far," said the statement.

"Most importantly, its clearing rate has dropped from last week's double-digit levels to 7% on Thursday and 5.35% yesterday [Wednesday]. UPMC is hoping for similar reductions in the three auctions scheduled for today [Thursday]."

Auctions scheduled for Thursday were $42.55 million in series 2002A-2 Allegheny County Hospital Development Authority/UPMC Health System revenue bonds via Goldman Sachs, $32.125 million in series 2004B-1 Allegheny County Hospital Development Authority/University of Pittsburgh Medical Center revenue bonds via Morgan Stanley and $41.95 million in subseries 2007A-3 Allegheny Hospital Development Authority/University of Pittsburgh Medical Center revenue bonds via UBS.

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