Care New England prices $84.94 million hospital revenue bonds

By Cristal Cody and Sheri Kasprzak

New York, Feb. 1 - Heading up a rather quiet Friday for bond pricing action was $84.94 million in series 2008A and 2008B hospital revenue bonds brought by the Rhode Island Health and Education Building Corp. for Care New England.

The building corporation priced $46.73 million in series 2008A bonds and $38.21 million in series 2008B bonds. The 2008A bonds priced in a serial structure from 2008 to 2032 at an initial coupon of 3.02% and the 2008B bonds priced in a serial structure from 2008 to 2037 at an initial coupon of 3.857%, according to a source familiar with the offering.

The bonds (Aaa) were priced at the weekly rate with the option to convert in whole by series to a daily, monthly or fixed-rate mode.

Proceeds from the series 2008A bonds will be used to refund the issuer's series 2002A bonds and proceeds from the 2008B bonds will be used to defease the 2002B bonds.

Banc of America Securities was the lead manager for the negotiated deal.

Pricings might be light

The coming week may be significantly lighter when it comes to new issue pricings, according to market insiders Friday.

"There's a lot going on with insurers right now and I think a lot of issuers are holding back a little to see what happens," said one sell-side source.

"Conditions are very uncertain for them [insurers]. We had clients who have postponed offerings and I'm sure more than a few are putting off offerings they may have otherwise done next week."

An issuer told Prospect News earlier this week that its bonds would be postponed until March because of troubles in the insurance sector.

"We're waiting because there's too much uncertainty right now with bond insurance issues swirling in the market," said Kevin Cohn with the San Francisco Airport.

The airport had planned on pricing $261 million in AMT and non-AMT bonds on Wednesday, but decided against it.

The bonds will now price March 26. The bonds (A1/A) are expected to price in a serial structure from 2012 to 2022 with Citigroup Global Markets as the lead manager.

On Thursday, Fitch downgraded bond insurer FGIC Corp. to AA from AAA. Fitch cited FGIC's move into the structured products sector and the subsequent subprime mortgage disaster that destroyed the credit quality of those products.

Insurers MBIA, Inc. and Ambac Financial Group, Inc. were rumored to receive cuts from rating agencies as well.

Also, Austin, Texas said earlier this week that market conditions were giving it pause on its offering of $173.375 million in public improvement refunding bonds.

The city is waiting on a better market before it sells the series 2008 limited tax general obligation refunding bonds (Aa1), said Art Alfaro, Austin's treasurer.

"We decided to pull that deal after all the activity in the market yesterday [Tuesday]," he said on Wednesday. "It was all over the place and was so volatile. We decided to see what the Fed does [Wednesday] and the market moved away from us."

The Federal Reserve made its second cut to interest rates in nine days, lowering it Wednesday 50 basis points to 3%.

"At this point, we're still realizing enough savings to meet the city's threshold," Alfaro said. "We're going to wait and see if the markets improve more."

The bonds may be sold at any time through July 10 and with a threshold of at least 4.25% of savings without having to renew city council approval, Alfaro said.

Lehman Brothers is managing the negotiated sale.

Proceeds will be used to refund a portion of outstanding debt for net present value savings.

Harris County's $351.27 million bonds

Looking to offerings in the coming week, Harris County, Texas, expects to price four bonds on Feb. 7 that total $351.27 million, the issuer said Friday.

The county is pricing $35 million series 2008A permanent improvement refunding bonds and $40 million series 2008A unlimited tax road refunding bonds.

The Harris County Flood Control District is pricing $120 million series 2008A and $156.27 million series 2008B flood control district contract tax refunding bonds.

The flood control bonds may be issued as fixed-rate and adjustable-rate bonds.

The fixed-rate bonds are rated Aa1/AA+/AA+. The adjustable-rate bonds have not received ratings yet, said Charisse Mosely, the county's deputy director of financial services.

The adjustable-rate bonds have preliminary maturities from Oct. 1 through 2028. Maturities have not been set on the fixed-rate bonds, Mosely said.

Morgan Keegan & Co. and Estrada Hinojosa & Co. are the lead managers, with Rice Financial Products Co., Jackson Securities, Southwest Securities and RBC Capital markets as co-managers.

Proceeds will be used to refund outstanding bonds.

Massachusetts College lines up revenue bonds

The Massachusetts State College Building Authority plans to price $90 million project revenue bonds, series 2008A, according to a preliminary official statement released Friday.

Bear, Stearns & Co. and Lehman Brothers are the lead managers of the negotiated deal, while Banc of America Securities LLC, Citi, Depfa First Albany Securities LLC, Raymond James & Associates and Samuel A. Ramirez & Co. are co-managers.

Proceeds will be added to the authority's project fund and for a debt service reserve fund.

Pricing is expected in February, but the exact pricing date was not immediately available.

Additional information from the underwriters and the authority, which finances and constructs facilities for colleges in the state, was not immediately available.

Fort Worth plans school bonds

Fort Worth Independent School District plans to price $232.135 million school building unlimited tax bonds.

The series 2008 bonds (Aaa/AAA) have serial maturities from 2009 to 2028, according to a preliminary official statement released Friday.

JPMorgan is the lead manager of the negotiated deal, with Estrada Hinojosa & Co., Siebert Brandford Shank & Co. and RBC Capital Markets as co-managers.

First Southwest Co. is the financial advisor.

The Tarrant County, Texas, district plans to use the proceeds to purchase school buses, acquire land and construct and equip school buildings.

Additional information was not immediately available.

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