West Contra Costa school district prices $120 million G.O. bonds; week in pricings remains quiet

By Cristal Cody and Sheri Kasprzak

New York, July 1 - The month of July got off to an inauspicious start for new issue volume, with only a few new offerings announced and a limited number of pricings conducted Tuesday.

Market sources told Prospect News this week that pricing action will mostly likely remain subdued ahead of the July 4 holiday on Friday.

Heading up Tuesday's light pricing activity was a $120 million offering of general obligation bonds from the West Contra Costa Unified School District in California.

The series 2008B bonds (A2/A-/A-) priced with a 5.46% true interest cost, said a source familiar with the sale.

The bonds, which were approved in a 2005 election, priced with 5% to 6% coupons to yield 3% to 5.5% for serial maturities from 2010 through 2028. The 2035 term bond priced with a 5.625% coupon to yield 4.85%.

Morgan Stanley was the winning bidder out of two bidders in the competitive sale.

"That's about what you would expect in this kind of market," the source said. "We would have liked to have more participation, but the levels were good."

Proceeds will be used to finance school construction and renovation projects approved by voters.

Avera sells $61.38 million

In other pricings from Tuesday, Avera Health System priced $61.38 million in series 2008C variable-rate demand revenue bonds Tuesday, said Michael Jost, accountant for the South Dakota Health & Educational Facilities Authority.

The bonds (A1//) were sold through the authority with Dougherty & Co. and Merrill Lynch as the lead managers.

The initial rate is 1.58%, and the rate resets weekly.

Proceeds will be used to refund the system's outstanding variable-rate debt and to construct, acquire and equip a facility to house a cancer center and outpatient surgery center.

Also, the Town of Gilbert in Arizona priced $187.9 million in series 2008 G.O. bonds on Monday, said an official statement.

The bonds (Aa2/AA/) are due from 2009 to 2023 with coupons from 3% to 5%. The yields range from 1.75% to 4.96%.

The bonds were sold on a competitive basis, but calls to the issuer for the winning bidder were not immediately returned.

Proceeds will be used to improve streets, highway, parks and recreational facilities.

Portland prices $67 million

In other news, the City of Portland in Oregon priced $67.085 million in series 2008 redevelopment and refunding revenue bonds (Aa3-//), said Eric Johansen, debt manager for the city. The terms, however, were not available on Tuesday.

The bonds were sold on a negotiated basis with Banc of America Securities as the senior manager.

The sale includes $35.215 million in series 2008A bonds, which are due 2009 to 2019, and $31.87 million in series 2008B bonds, which are due 2019 to 2024.

Proceeds will be used to finance capital improvements to the South Park Block urban renewal area and to refund series 2000A bonds.

Michigan hospital authority plans deal

Leading upcoming offerings, Michigan State Hospital Finance Authority expects to price $203.665 million fixed-rate bonds the week of July 14 and $173.965 million variable-rate bonds on July 30, the issuer said Tuesday.

The series 2008A revenue and refunding bonds (A1//AA-) for McLaren Health Care and members of the credit group will be sold in a negotiated sale managed by Citigroup Global Markets.

The bonds probably will price mid-week, said Tom Letavis, executive director.

The authority also plans to price $173.965 million series 2008B revenue and refunding bonds for McLaren Health Care on July 30.

Proceeds will be used for health-care facility renovation projects and to refund the series 1994A revenue refunding bonds for Pontiac Osteopathic Hospital; the series 2003A revenue and refunding bonds and 2003B revenue bonds for Mount Clemens General Hospital and the series 2005A revenue and refunding bonds and series 2005B revenue bonds for McLaren Health Care.

Proceeds also will be used to repay loans to the authority, including $59.545 million from the 1994 No. 1 hospital note by Pontiac and Mount Clemens' $79.735 million 2003 No. 1 note and $82.8 million 2003 No. 3 note.

Kentucky Economic sale

In other upcoming sales, the Kentucky Economic Development Finance Authority expects to price $359.997 million in series 2008 Louisville Arena project revenue bonds, said a preliminary official statement.

The sale includes $100 million in series 2008A-1A, $100 million in series 2008A-1B, $80 million in series 2008A-1C, $2.505 million in series 2008A-2, $31.112 million in series 2008A-3, $30 million in series 2008B and $16.38 million in series 2008C bonds. The 2008A-1A, 2008A-1B and 2008A-1C bonds have variable rates; the series 2008A-2 bonds have a fixed rate; the series 2008A-3 bonds are capital appreciation bonds; and the 2008B and 2008C bonds have fixed rates.

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

Proceeds will be used for the acquisition, construction, development and installation of an arena in Louisville for use as office space for Humana Inc.

Cook County offering

Also coming up, Cook County, Ill., expects to price $150 million in series 2008 sales tax anticipation notes, said a preliminary official statement released Tuesday.

The notes, which are due Aug. 3, 2009, will be sold on a negotiated basis with Morgan Stanley as the senior manager. The co-managers are Merrill Lynch, Grigsby & Associates and Ramirez & Co.

Proceeds will be used for working cash funds for the county until taxes can be collected.

Northern California Power

Northern California Power Agency plans to price $143 million hydroelectric revenue bonds on July 8, according to Moody's Investors Service.

The sale includes $135 million series 2008 hydroelectric No. 1 revenue bonds and $8 million series 2008D serial bonds.

The fixed-rate bonds (A2//) will refund the series 2002A, 2002B, 2003A and 2003B variable-rate bonds, which are converted to a fixed rate via interest rate swaps.

Additional information was not available by press time.

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