More issuers put deals on back burner; Kansas Development Finance prices $62 million revenue bonds

By Cristal Cody and Sheri Kasprzak

New York, Sept. 18 - More issuers announced Thursday that they will postpone large sales planned for this week because of market concerns over Wall Street's shakeup and the Federal Reserve's emergency loan to insurer American International Group, Inc.

The William Beaumont Hospital in Michigan postponed the pricing of $583.72 million revenue and refunding bonds, a source said Thursday.

"Because of market conditions, Beaumont has pulled its planned bond issuance for this week," the source said.

The series 2008V fixed-rate and series 2008W term-rate bonds were expected to price on Thursday.

The bonds (A1/A/A+) will be sold through the City of Royal Oak Hospital Finance Authority.

Morgan Stanley is the senior manager of the negotiated sale.

Proceeds will be used for construction and renovation costs, to refund outstanding bonds and to pay termination payments made under interest rate hedge agreements for the refunded bonds.

The hospital plans to refund the $48.675 million in series 2001N revenue refunding bonds, $31.275 million series 2001O revenue refunding bonds, $82.675 million series 2003P revenue bonds, $47.4 million series 2003Q revenue refunding bonds and $206.1 million series 2006R and 2006S revenue bonds and series 2006YT revenue and refunding bonds.

Athens-Clarke sale delayed

In other offerings postponed Thursday, the Unified Government of Athens-Clarke County in Georgia delayed its planned sale of $220.02 million water and sewerage revenue bonds, the issuer told Prospect News.

"The market uncertainty led us to presume that we probably wouldn't get a reasonable price and so we're going to wait and see when things settle out," said John Culpepper, finance director.

"We understand a number of other governments are doing the same thing."

The county plans to look at the market on a weekly basis to determine a new pricing date for the series 2008 bonds (Aa3/AA-/AA), which have serial maturities from 2009 through 2028 and terms due 2033 and 2038.

Citigroup Global Markets is the senior manager of the negotiated sale.

Proceeds will be used to refund the series 1997 revenue bonds and to pay for renovations and additions to the water and sewerage system.

Omaha Public Power deal

Elsewhere, the Omaha Public Power District put off the sale of its $105 million in series 2008A electric system revenue bonds, said Kristine Dungan, special financial analyst for the district.

The bonds were slated to sell Wednesday through lead manager Wachovia Bank.

"Due to the overall turmoil in the financial markets, the district has postponed the sale of the 2008A bonds," Dungan said Thursday.

"The district's preference is to let the market settle and resume the bond sale in a few weeks."

The bonds are due 2009 to 2043, and the proceeds will be used for capital expenditures.

Kansas Development bonds priced

Moving to light pricing action, the Kansas Development Finance Authority was one of the few issuers to get a deal done this week, pricing $62.097 million in series 2008L revenue bonds Thursday, said a sellside source close to the deal.

The bonds (Aa2/AA/) were sold competitively with Edward Jones as the winning bidder. The true interest cost came to 4.926111%.

The bonds are due 2009 to 2028 with coupons from 2% to 5.25%, all priced at par.

Proceeds will be used to provide the state Department of Administration with funds for the state capitol project, refund a bond anticipation note, provide funds to the Department of Corrections to refund a bond anticipation note and provide funds to the University of Kansas School of Pharmacy.

Minneapolis to price $491.29 million revs

Market concerns didn't stop some issuers from moving ahead with their offerings, including Minneapolis, which plans to price $491.29 million revenue bonds for Fairview Health Services, according to a preliminary official statement.

The sale includes $201.29 million series 2008A bonds with serial maturities from 2012 through 2028 and $290 million in series 2008B revenue term bonds.

The bonds are insured by Assured Guaranty Corp.

Citigroup Global Markets is the senior manager of the negotiated sale.

Proceeds will be used to finance projects, including a replacement children's hospital at the University of Minnesota Medical Center, and to refund the series 2004A, 2005A, 2005B and 2005C revenue refunding bonds.

New York's $162.46 million G.O.s

Also coming up, the State of New York intends to price $162.46 million general obligation refunding bonds through a competitive sale on Tuesday, according to a preliminary official statement.

The sale includes $148.745 million series 2008C tax-exempt refunding bonds and $13.715 million series 2008D taxable refunding bonds.

The series 2008C bonds have serial maturities from 2010 through 2032.

The series 2008D bonds are due in 2010 and 2011.

Public Resources Advisory Group is the state's financial adviser.

Proceeds will be used to refund outstanding G.O. bonds, including $39.425 million series 2001B, $32.225 million series 2001C, $19.975 million series 2001D, $34.85 million series 2002A, $30.975 million series 2002B and $27.6 million series 2002C bonds.

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