Pricing action heats up; San Francisco prices $272.22 million G.O. refunding bonds

By Cristal Cody and Sheri Kasprzak

New York, May 20 - Tuesday proved to be a rather busy day for pricings, but activity for the remainder of the week appears to be comparatively quiet.

"I think people are still interested in munis," said one sellside market source reached Tuesday afternoon.

"Issuers are still on edge, but the market does seem to be improving. I think it's a temporary situation. I don't see it as a trend of any sort."

If Tuesday's pricing action is any indication, there is still a big appetite for munis.

The active day for pricings was led by the city and county of San Francisco, which priced $272.22 million in general obligation refunding bonds. The bonds priced with 2.987% and 4.588% true interest costs, said Nadia Sesay, director of San Francisco's public finance office.

"We had anticipated a higher TIC, but this is definitely good news for us," Sesay said.

The $232.075 million series 2008R1 tax-exempt bonds priced with a 2.987% TIC, she said. The bonds priced with 2.85% to 5% coupons to yield 1.65% in 2009 to 3.97% in 2021.

The $40.145 series 2008R2 taxable bonds priced with a 4.588% TIC. The bonds priced with 4.75% to 5% coupons to yield 3.06% in 2009 to 4.9% in 2018.

The bonds (Aa3/AA/AA-) were sold in competitive sales.

Lehman Brothers was the winning bidder on the series 2008R1 bonds out of six bids.

Morgan Keegan & Co. was the winning bidder on the series 2008R2 bonds out of nine bids, Sesay said.

Proceeds will be used to refund a portion of series 1997-1, 1998, 1999D, 2000 and 2001 G.O. bonds to reduce the city's overall debt service payments.

Hartford County sells bonds

Elsewhere, the Metropolitan District of Hartford County, Conn., priced $80 million G.O. bonds with a 3.8267% TIC on Tuesday, according to the issuer's financial adviser.

The series 2008 bonds (Aa2/AA+/) priced with 3.125% to 4.125% coupons to yield 1.8% in 2009 to 4.25% in 2028, said Janette Marcoux, senior vice president of First Southwest Co.

Citigroup Global Markets was the successful bidder out of six bids in the competitive sale.

"This was very aggressive bidding," Marcoux said. "The district officials were extremely pleased - this is the lowest TIC on a 20-year issue the district has ever sold."

Proceeds will be used to refund $63.825 million bond anticipation notes that mature on June 12, 2008 and to provide funds for sewer, water and pubic improvement projects.

Pennsylvania prices $405.03 million

In other pricing news Tuesday, the Commonwealth of Pennsylvania was in the process of pricing $405.03 million in series 2008 G.O. bonds Tuesday, said a source at the issuer Tuesday afternoon.

"The details aren't completely hammered out yet," the issuer source said.

"We're hoping to have all of the information available tomorrow. We're still looking at a few of the maturities and figuring out a few things."

The sale includes $325 million in first series bonds and $80.03 million in first series refunding bonds. The first series bonds are due 2009 to 2028, and the first series refunding bonds are due 2008 to 2013.

Proceeds will be used for the construction, acquisition and rehabilitation of capital facilities; maintenance and protection of open space and other environmental initiatives; compensation for service in the Persian Gulf conflict; and for the refunding of outstanding G.O. bonds.

Miami-Dade school board bonds

Elsewhere, the School Board of Miami-Dade County in Florida priced $150 million in series 2008B revenue anticipation notes Tuesday, said John Schuster in the board's press office.

The pricing terms, however, were not immediately available.

The bonds were sold on a competitive basis and are due Jan. 30, 2009.

Proceeds will renew a portion of a loan financed under the series 2008A revenue anticipation renewal notes and retire a portion of the 2008A notes.

Methodist Le Bonheur bond sale

Methodist Le Bonheur Healthcare in Tennessee was expected to price $110.9 million series 2008C fixed-rate revenue bonds on Tuesday.

The bonds (A2//) will price through the Health, Educational and Housing Facility of Shelby County, Tennessee.

Methodist Le Bonheur also intends to price $270 million series 2008A and B variable-rate bonds on June 11.

Morgan Keegan and JPMorgan are the managers of the negotiated sales.

Proceeds will be used to fund $184 million of projects, including the expansion of the Le Bonheur Germantown hospital and the new Le Bonheur Children's hospital, and to refinance and convert $70 million of the outstanding series 2004C auction-rate bonds and all of the series 1985C, series 1995 and series 1998 bonds.

The sale could not be confirmed by press time.

Johnson Memorial bonds price

Moving to other pricings, the Johnston Memorial Hospital Authority in North Carolina priced $144.96 million Federal Housing Administration insured mortgage revenue bonds on Tuesday, a source with the state told Prospect News.

The series 2008 bonds (Aaa/AAA/) are insured by Financial Security Assurance.

The state coordinates the sale of all public debt in North Carolina.

"Being a HUD deal, we have to run cash flows. It could be Thursday before" the pricing terms are completed, the source said.

Banc of America Securities LLC is the senior manager of the negotiated sale.

Proceeds will be used to repay $21.69 million prior debt and to pay the costs to expand and renovate health-care facilities, including construction of an outpatient medical center to replace the Summit Surgical Center and extensive renovations to add about 150,600 square feet to the existing hospital facilities at the Smithfield campus.

Avera Health to sell bonds

Heading up coming sales, Avera Health in South Dakota intends to price $252.735 million fixed-rate and variable-rate revenue bonds in June and July, according to a preliminary official statement released Tuesday.

The bonds will price through the South Dakota Health and Educational Facilities Authority.

The $139.92 million series 2008A variable-rate bonds and $51.435 million series 2008B fixed-rate bonds are expected to price on June 18, according to the statement.

The $61.38 million series 2008C variable-rate bonds are expected to price on July 1.

Dougherty & Co. is the senior manager of the negotiated sale, and Merrill Lynch & Co. is the co-manager.

Proceeds will be used to pay for projects that include acquiring, constructing and equipping a five-story facility in Sioux Falls, S.D., that will house the Avera Cancer Institute and to replace Avera's variable-rate debt.

The refunding includes $23.625 million series 1994 revenue bonds, $22.53 million series 2000 revenue bonds and $61.075 million series 2006 revenue bonds. Proceeds also will be used to repay the series 2008 bridge loan obligation issued on May 2 to refund the series 2004 bonds.

Citizens Property's $1.5 billion deal

Citizens Property Insurance Corp. expects to price $1.5 billion high-risk account senior secured bonds next week, the issuer said Tuesday.

The Jacksonville, Fla., company plans to close on the bonds the second week of June, spokesman John Kuczwanski said.

The series 2008A bonds (A2/A+/) have maturities from March 1, 2011 through March 1, 2013.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to provide resources to the high-risk account, pending a need to pay policy claims and other expenses from future storms.

Citizens Property was created by the Florida Legislature to provide residential and commercial property and casualty insurance coverage in the state.

Sacramento utility bonds

The Sacramento Municipal Utility District intends to price $503.555 million electric revenue refunding bonds, according to a preliminary official statement.

The series 2008U bonds (A1/A/A) have serial maturities from 2014 through 2027.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

Proceeds will be used to finance or refinance improvements and additions to the district's electric system and to refund all or a portion of the district's outstanding $406.85 million auction-rate bonds.

A majority of the bonds have not received sufficient clearing bids in recent auctions and have resulted in failed auctions, the district said in the statement.

Additional information was not immediately available.

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