Health care active in new issue deals, secondary market; Bronson Methodist of Michigan plans $203 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Nov. 18 - Despite some news that it may be tough going for health-care issuers, quite a few hospital- and health-care-related offerings were popping up in the primary muni market Tuesday, and one trader said she saw health-care names in demand in the secondary market as well.

"It depends upon a lot of things, including credit ratings," said one sellside source when asked about the surge of new health-care deals.

"There's demand out there, for sure, for AA and AAA rated stuff. Spreads are getting wider, especially for some of the A rated issuers, so I can see where it might be tough for some issuers."

Among the upcoming health-care offerings in the pipeline is a $203.16 million sale of series 2008 hospital revenue refunding bonds from the Bronson Methodist Hospital in Michigan.

The bonds (A2) will be sold through the Kalamazoo Hospital Finance Authority, said a preliminary official statement released Tuesday.

Ziegler Capital Markets is the senior manager for the negotiated sale.

The bonds are due 2009 to 2018 with term bonds due 2028 and 2036.

Proceeds will be used for refunding the hospital's series 1998, 2005A, 2005B and 2006 bonds.

New Mexico Equipment Loan deal

In other upcoming health-care deals, the New Mexico Hospital Equipment Loan Council is expected to price $225 million in 2008 health-care system revenue bonds for Presbyterian Healthcare Services, said a preliminary official statement.

The sale includes $75 million in series 2008B bonds, $75 million in series 2008C bonds and $75 million in series 2008D bonds.

Goldman, Sachs & Co. is the lead manager for the negotiated offering.

The bonds (Aa3/AA-/AA-) are due Aug. 1, 2034 and initially bear interest at the daily or weekly rate.

Proceeds will be used for reimbursing Presbyterian for the construction and equipment of buildings needed to operate the facility, for the refunding of the council's series 2005A and 2005B bonds and for the refinancing of a loan used to refund the council's 2004A through 2004D bonds and 1993A bonds.

Health care active in secondary

Looking to secondary market action, one trader Tuesday said she'd seen more offerings trading in the health-care sector than in previous weeks.

"There has been a bit more demand for health care than we've seen in a while," she said.

"There's a tendency toward the long end right now, but we've seen plenty of demand for shorter-term bonds."

Over on the long end, where yields have been running wild, Denver Health and Hospital Authority's series A 4.75% 2036s were seen trading at 10.78%.

Cape Fear Valley Health System of North Carolina's bonds were in play. The system's 4.1% 2015s were seen trading at 5.25% Tuesday.

Elsewhere, the 5% 2026s of Maryland's Johns Hopkins Hospital were seen trading at 5.79%.

Virginia Public School sale

Moving back to other upcoming offerings, the Virginia Public School Authority plans to price $125.14 million in series 2008B school financing bonds at some point this month, said a preliminary official statement.

The bonds will be sold on a negotiated basis with Morgan Keegan & Co. as the lead manager.

A source at the state treasurer's office said earlier this week that the bonds are expected to sell in November, but no exact pricing date has been set.

The bonds are due 2009 to 2033.

Proceeds will be used for the construction, renovation and equipment of school buildings throughout the state.

Indianapolis bond bank notes

In other upcoming sales, the Indianapolis Local Public Improvement Bond Bank is gearing up to sell $127 million in bond bank notes, said a preliminary official statement.

The notes are due June 1, 2009.

The sale includes $67.2 million in series 2008C bonds, $52.8 million in series 2008D bonds and $7 million in series 2008E bonds.

City Securities is the lead manager for the negotiated offering.

Proceeds will be used for the purchase of warrants of some qualified entities in Marion County, Ind., ahead of the collection of ad valorem taxes.

Massachusetts, Connecticut sales

In Tuesday's primary market action, the Commonwealth of Massachusetts had been on the schedule to price $552.755 million in series 2008A general obligation refunding revenue bonds through lead manager Citigroup Global Markets.

The bonds are due 2009 to 2023 with terms due 2028 and 2032.

Proceeds will be used to refund the commonwealth's series 2007 bonds.

The full pricing terms were not immediately available Tuesday evening.

Elsewhere in pricing news, the State of Connecticut had been expected to price $300 million in series 2008A special tax obligation bonds, also through Citi.

Those bonds are due 2009 to 2028.

Proceeds will be used for the completion of infrastructure projects throughout the state.

Calls for pricing terms were not immediately returned Tuesday.

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