California's cash to run out; Washington Airports delays sale; Fairfax prices with 2.54% TIC

By Cristal Cody

New York, Oct. 1 - New offerings slowed considerably Wednesday as a few issuers moved forward with delayed sales and others postponed sales to as late as January.

California treasurer Bill Lockyer also announced the state will run out of cash reserves this month unless it can move forward with a planned revenue anticipation note sale.

One sellside source told Prospect News that several deals are in the works or are ready to price now.

"When the market is ready for business, we'll be ready to come back in," the sellsider said.

California's cash reserves will be exhausted by the end of October unless the market improves enough to allow the upcoming revenue anticipation note sale, Lockyer said Wednesday.

The failure to adopt a national economic recovery plan is hindering the state's ability to sell infrastructure bonds and short-term notes, he said.

One upcoming sale from the state includes $94.135 million in federal highway grant anticipation bonds from the California Department of Transportation on Oct. 8, according to the state treasurer's office.

The series 2008A bonds (//AA-) are due in 2020.

Proceeds will be used to finance two California highway rehabilitation projects in the cities of Auburn and Truckee.

Washington Airports postpones sale

Market concerns prompted the Metropolitan Washington Airports Authority to delay Wednesday's sale of $175 million in revenue bonds up to January, a source with the issuer told Prospect News.

"We can go to the market any time up to then," the source said. "We delayed the sale because of the current conditions in the market."

The series 2008B bonds (Aa3/AA-/AA) will be sold through a negotiated sale led by senior manager Siebert Brandford Shank & Co.

Proceeds will be used to pay for capital project costs, capitalized interest on outstanding bonds, a deposit to the reserve account and the costs to terminate interest rate swap agreements with Wachovia Bank and the Bank of Montreal.

Fairfax County Housing in Virginia prices

One issuer did have a good day Wednesday. The Fairfax County Redevelopment and Housing Authority in Virginia was pleased to price $104.105 million in bond anticipation notes with a 2.54% true interest cost, a market source told Prospect News.

The series 2008B notes (MIG 1/SP-1+/), due Nov. 3, 2009, priced with a 4% coupon to yield 2.558%.

Bank of America was the winning bidder out of two bids in the competitive sale.

"It's better than one and better than none," the source said.

Proceeds will be used to help refund the $105.485 million outstanding from the series 2007B bond anticipation notes, which mature Oct. 9, 2008.

Morgan Stanley buys Cascade Healthcare bonds

Cascade Healthcare Community Inc. in Oregon planned to sell $83.68 million revenue refunding bonds through the Hospital Facility Authority of Deschutes County, but investors haven't been enthusiastic in the last two weeks.

"Morgan Stanley was supposed to buy them all because they weren't moving," a source with the issuer said Wednesday.

The series 2008 bonds were expected to price on Wednesday through a negotiated sale managed by Morgan Stanley.

Additional information was not immediately available.

Proceeds will be used to refund, redeem or defease the series 2005A revenue bonds, pay financing and legal expenses and fund a debt service reserve fund.

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